Executive Board of the European Central Bank, University of Bonn (on leave), #NieWiederIstJetzt
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May 29 • 20 tweets • 6 min read
In my speech at the BOJ-IMES conference, I reviewed the benefits & costs of asset purchases based on a large body of research. Central banks have used asset purchases for two main purposes: to stabilise financial markets and to ease financing conditions near the lower bound. 1/19
According to the signalling channel, asset purchases signal a commitment to a period of low interest rates, made credible by central banks’ exposures to duration risk. But this has not stopped central banks from raising rates when inflation surged, weakening this channel. 2/19
Feb 16 • 21 tweets • 7 min read
As @paulkrugman once noted, “productivity isn't everything, but, in the long run, it is almost everything.” Yet, the euro area’s productivity trajectory has been dismal. In today’s speech @EUI_EU, I asked how euro area firms could be turned from laggards into leaders. 1/20
At the turn of the millennium, the euro area was operating at the global productivity frontier. But in the following years, it fell behind other economies like the United States and has not been able to recover from this loss of competitiveness. 2/20
Dec 30, 2023 • 14 tweets • 4 min read
Looking back at 2023, my most interesting (and experimental) communication experience was an interview with @SZ without words. #SagenSieJetztNichts #InterviewWithoutWords 1/14 sz-magazin.sueddeutsche.de/sagen-sie-jetz…
First question: What is inflation? 2/14
Nov 3, 2023 • 24 tweets • 8 min read
Yesterday I had the pleasure to deliver the Homer Jones Memorial Lecture at the @stlouisfed. In my speech I compared the disinflation process to long-distance running, arguing that "the last mile" is likely to be the hardest. 1/23
Headline inflation in the euro area declined rapidly to 2.9% in October from its peak of 10.6% one year earlier. The bulk of this large drop reflects the substantial decline in the contributions from energy and food inflation. 2/23
Sep 27, 2023 • 23 tweets • 8 min read
In my #ThĂĽnenLecture @VfS_econ, I discussed the role of money in explaining the recent surge in inflation in the euro area. According to the quantity theory of money, there is a long-run one-to-one relationship between money growth and inflation. 1/23
Cross-sectional and time series evidence have for a long time provided strong support in favour of a stable long-run relationship between money and prices. Across countries, the long-run averages of inflation and excess money growth fall near the 45-degree line. 2/23
May 20, 2023 • 6 tweets • 3 min read
In conclusion, central banks have an important role to play as lenders of last resort to tackle liquidity crises. Even in high-inflation periods separation can be ensured if tools are targeted and temporary, and the underlying issue is one of liquidity rather than solvency. 25/30
Monetary policymakers cannot address solvency issues. A sound financial regulation and supervision are the best protection against financial dominance, just as a functioning fiscal framework is needed to protect against fiscal dominance. 26/30
May 20, 2023 • 25 tweets • 8 min read
Yesterday I spoke at a conference at @FMG_LSE@LSEnews in honour of the much-admired Charles Goodhart about whether monetary and financial stability can be separated (“separation principle”). Here is the obligatory thread on the main points, details are found in the speech. 1/30
We have seen a fundamental change in the macroeconomic environment. After years of low inflation and low interest rates, inflation has come back with a vengeance, and central banks have raised interest rates in a rapid and synchronised fashion. 2/30
Apr 24, 2023 • 16 tweets • 3 min read
This thread 🧵collects key statements from my interview with @politico that was published today. Please have a look at the full transcript, which you find under the link below. 1/15
We are seeing a change in the drivers of inflation. It started with supply-side shocks – bottlenecks and rising energy prices –, which are now fading, while at the same time demand-side factors are gaining importance. The macroeconomy has proven quite resilient. 2/15
Mar 29, 2023 • 22 tweets • 9 min read
In a speech at @Columbia University, I discussed how monetary policy @ecb could be implemented in the future. I outlined the options available for maintaining control over short-term interest rates during balance sheet normalisation. This thread summarises my key points. 1/22
The launch of asset purchases and TLTROs in response to a long period of low inflation and to the pandemic resulted in a strong balance sheet expansion that was significant in historical and international comparison. 2/22
Jan 4, 2023 • 19 tweets • 10 min read
2022 was another challenging year for the @ecb. My personal review of the year collects some of my speeches and a few striking charts. All speeches and accompanying slides can be found on the @ecb’s website. A special thanks goes to #ECBstaff for their continuous support! 1/19
The speech “Looking through higher energy prices? Monetary policy and the green transition” (8 Jan 2022) argued that monetary policy cannot afford to look through higher energy prices if they pose a risk to medium-term price stability. #ClimateChange 2/19 ecb.europa.eu/press/key/date…
Nov 25, 2022 • 20 tweets • 6 min read
In my speech “Finding the right mix: monetary-fiscal interaction at times of high inflation” at the Bank of England Watchers’ conference I explained why I see a risk that monetary and fiscal policies are pulling in opposite directions, leading to a suboptimal policy mix. 1/19
In the recovery from the pandemic, demand started to outpace supply, putting upward pressure on prices. This was reinforced by a surge in energy and food prices after Russia’s invasion of Ukraine. Inflation broadened substantially, pushing up underlying inflation. 2/19
Oct 1, 2022 • 15 tweets • 5 min read
In my speech @ForoLaToja in beautiful Galicia I talked about “Monetary policy in a cost-of-living crisis” and had an interesting panel discussion about inflation with my former colleague Carlos Costa and with Antón Costas @CESEspana, moderated by Alejandra Kindelán @Aebanca. 1/15
High inflation means that many people are suffering a concerning loss in their purchasing power as their real, that is inflation-adjusted, wages are declining. My speech discusses what this decline in real wages means for monetary policy. 2/15
May 13, 2022 • 13 tweets • 5 min read
In my speech on “The globalisation of inflation”, I argue that global factors matter for domestic underlying inflation and that monetary policy needs to take these factors into account. This thread summarises the main messages. 🧵1/13
In the euro area, the exceptional surge in energy prices is the main contributor to headline inflation. But core inflation, too, is at a record high, accelerating at a pace more than twice as much as the pre-pandemic historical average. 2/13
Apr 2, 2022 • 17 tweets • 6 min read
In my speech @Ambrosetti_ on “Managing policy trade-offs”, I discuss the response of monetary policy to the contractionary supply shock caused by Russia’s invasion of Ukraine, and what role fiscal policy can play in macroeconomic stabilisation. #Finance2022 1/16
Thanks to the response of fiscal and monetary policy during the pandemic, the euro area was on track for one of the fastest recoveries in history before the invasion: from trough to peak, euro area real GDP expanded by 17.5% until year-end 2021. 2/16
Jan 2, 2022 • 18 tweets • 11 min read
Speeches are an important element of central bank communication. After two years at the @ecb’s Executive Board, I would like to present a selection of the most relevant of my (more than 30) speeches in a long thread🧵. 1/18
There are several categories of speeches: (1) on #MonetaryPolicy, explaining current policy considerations, (2) on #Narratives about monetary policy, and on the relationship of monetary policy & (3) #FiscalPolicy, (4) #FinancialStability, (5) #Inequality, (6) #ClimateChange. 2/18
May 20, 2021 • 9 tweets • 4 min read
Today we @ecb issued our new digital publication and interactive tool on inflation. It is one of our attempts to better explain the concept & measurement of inflation, its heterogeneity across goods and countries as well as the difference between perceived & actual inflation. 1/8
Chapter 1 explains the concept of inflation and why it matters. You can look at the inflation rate in a particular country for a particular category of goods and services, which gives an impression of the heterogeneity across countries and goods. 2/8
Apr 9, 2021 • 14 tweets • 4 min read
In an interview with @derspiegel, conducted by @Bartz70Tim & @KaiserSte, I talk about recent inflation developments, monetary and fiscal policy in the pandemic, the @ecb’s role in combating climate change and financial stability. Below you find some key messages. 1/14
As we are still far from reaching our inflation aim of below, but close to, 2%, a sustainable rise of inflation in the direction of 2% would be good news. That would mean that the economy is gaining momentum and aggregate demand is increasing. 2/14
Mar 15, 2021 • 11 tweets • 4 min read
For those of you looking at weekly #PEPP purchase numbers, let me give you a brief explainer how to read our numbers. For PEPP, there are three types of publications: weekly, monthly and bimonthly. #NerdyThread#ECBWatchers#Servicetweet@ecb 1/11 ecb.europa.eu/mopo/implement…
On Mondays at 15:45 CET, we publish the Eurosystem’s PEPP holdings (at amortised cost), as of the previous Friday, on our website: 2/11
Nov 15, 2020 • 14 tweets • 3 min read
Large-scale government & central bank interventions in the COVID-19 crisis have revived the debate on the alleged "zombification" of the economy if unviable firms are kept alive. In our recent VoxEU column with @laeven_luc & @gschepen, we survey the existing literature. 1/14
Why would banks lend to "zombie firms"? On the dark side, low-capitalised banks may engage in the "evergreening" of loans to avoid loss recognition. On the bright side, banks may lend to preserve valuable relationships, which can also avoid disruptions of supply chains. 2/14
Sep 20, 2020 • 11 tweets • 5 min read
On Friday, I gave a speech at Deutscher @juristentag about the distributional effects of the COVID-19 pandemic and the danger of “unequal scars”. My goal was to add a European dimension to the debate. Here is my usual Twitter summary, including some of the charts. 1/11
The pandemic is a global shock that hit all euro area countries almost simultaneously. But it has become increasingly clear that the pandemic has very different impacts on different countries, as can be seen from the @EU_Commission’s forecast of economic growth. 2/11
Aug 26, 2020 • 6 tweets • 4 min read
Today I gave a speech on the @ecb’s negative interest rate policy (NIRP) at the @EEANews Annual Congress in a panel with @helene_rey, Tobias #Adrian & Rafael #Repullo. In the speech, I could draw on fantastic ECB research, featuring @AngelaMaddaloni , @fheider & many others. 1/6
The NIRP helped to shift the perceived lower bound on interest rates into negative territory, supported by forward guidance that left the door open for further rate cuts. The zero lower bound was transformed into an effective lower bound below zero. 2/6
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