In economy, the research interest of the institute focuses on various issues related to political economy, transition economics, development economics, and international economics.
One of the main focuses is fiscal policy through which governments respond to popular demands. The post-Communist region embarked on the path of political and economic transition with a special heritage, which includes distrust and skepticism towards authorities, excessive reliance on the state and widespread evasion of rules. While the formal institutions of democracy and capitalism have been built during the accession to the European Union, the informal institutions often conflict with them. Deficit bias, growing indebtedness and consolidations with poor structure are symptoms of the underlying institutional problems. An interesting lesson of the subprime crisis is that such symptoms can occur in a variety of environments so an important aspect of the research is to apply the lessons learned from the post-Socialist region to other regions such as the Southern countries in the EU.
Another field of our current research interest is the analysis of different economic development paths in the European outer periphery ('the European Neighborhood, but also the EU-candidate countries of the Balkans). The European integration is a natural economic anchor for its neighborhood; trade agreements, harmonization issues, investments, and development aids are all important indicators of the European economic soft-power in the region. We investigate the possible answers of the 'neighborhood regions' to the challenges of globalization, with a special regard on the economic transformation of Turkey with its impacts on the country's regional position, and the effects of some regional developments (e.g. the Arab spring) on the future of the Euro-med process.