Real Sectors

This research theme investigates the implications of differences in price stickiness across economic sectors and the interconnectedness of sectors via input-output relationships for understanding business cycle dynamics and monetary policy effects. It matters because conventional models assuming uniform price rigidity across sectors fail to capture observed heterogeneity in sectoral inflation and output responses. These insights improve the estimation of structural shocks' contributions to aggregate and sectoral fluctuations, further aiding optimal monetary policy design.

Research under this theme focuses on understanding investment behavior across various non-oil sectors in economies seeking diversification and sustained growth, notably Saudi Arabia and Nigeria. It examines the impact of macroeconomic variables such as output, interest rates, exchange rates, and financial sector development on sectoral investment, incorporating econometric techniques capturing short- and long-run relationships. The findings inform policy design aimed at enhancing investment-led growth by addressing sector-specific characteristics and constraints in emerging and resource-reliant economies.

This line of research examines the extent and economic significance of labor shifts across sectors and their contribution to aggregate productivity changes over the business cycle. It emphasizes the differential roles of within-sector productivity improvements and between-sector labor reallocations during distinct economic phases (expansions, recessions, and recoveries), using transitional economies as a setting. Understanding this dynamic informs on whether sectoral restructuring acts as a growth catalyst or burden through various macroeconomic environments.

This research theme probes how the degree of irreversibility and option-like flexibility affect investment timing and intensity across different asset classes, such as machinery versus buildings. By empirically testing real options theory predictions, these studies aim to explain firms' investment equations and behaviors under uncertainty, particularly whether investment decisions incorporate strategic deferment options and how they vary by asset specificity. Insights help reconcile observed investment patterns with theoretical models of investment under uncertainty.

This theme explores the adoption of advanced data analytics, machine learning, and artificial intelligence techniques in real estate investment decision-making amid the 4IR era, characterized by big and complex data sources beyond traditional metrics. It investigates barriers to adoption, identifies drivers facilitating integration, and develops models or frameworks supporting real estate professionals’ enhanced analytical capabilities. The goal is to improve investment appraisal accuracy and market performance.

Focusing mainly on the US economy, this theme analyzes the long-term structural imbalance between stagnant real wages and rising productivity, its role in generating latent aggregate demand deficiencies, and consequent macroeconomic challenges such as financial vulnerabilities and secular stagnation risk. It employs Keynesian growth accounting frameworks to link labor income dynamics with consumption and aggregate demand sustainability, informing policy debates on wage growth, debt accumulation, and economic recovery strategies.

This research addresses the longstanding challenge of quantifying the size and segmentation of the U.S. commercial real estate (CRE) market using direct census data rather than estimates or extrapolations. Understanding the market scale, property types, and geographic distributions is crucial for portfolio allocation, risk assessment, and macroeconomic analysis. The study critiques prior approximation methods and presents refined valuation approaches to improve measurement accuracy and market understanding.

This theme analyzes how trade linkages and financial intermediation mechanisms influence the transmission of global financial shocks to real sector outcomes in economies heavily dependent on trade. It examines the role of trade finance availability in export performance during crises, emphasizing the interconnectedness of financial and real sectors and their joint impact on macroeconomic resilience and recovery in the SEACEN region.