We suggest to consider conformal factor dynamics as applying to compos
ite bound states, in the framework of the 1/N expansion. In this way,
a new model of effective theory for quantum gravity is obtained. The r
enormalization group (RG) analysis of this model provides a framework
to solve the cosmological constant problem, since the value of this co
nstant turns out to be suppressed, as a result of the RG contributions
. The effective potential for the conformal factor is also found.