Just presented my new paper “What next for r*? A capital market equilibrium perspective on the natural rate of interest” at #BPEA2025. ⭐️🤩💫✨

Paper, summary and slides here:

A thread 🧵 on the main findings: brookings.edu/events/bpea-fa… Two striking macro facts over the last half century:

1⃣ Real interest rates in advanced economies have trended down for decades.
2⃣ Wealth-to-GDP has doubled.

But lately, long rates have shot up together with short term rates. Is this the end of secular stagnation?

👨‍🎓New paper, with @MortenORavn —

***Brothers in Arms: Monetary-Fiscal Interactions Without Ricardian Equivalence***

Most central bankers would agree that:
🥇reacting strongly to inflation is paramount,
🥈monetary policy must be "active",
🥉monetary policy is independent

1/N But central banks are also busy building models in which Ricardian Equivalence does not hold — if the govt sends cheques to people, some of those cheques are spent.

Our main point: consensus 🥇🥈🥉 must be adjusted if Ricardian Equivalence does not hold 2/N

Wywiad @Piotr__Wojcik ze Sroczyńskim krytykuje upolitycznioną dyskusje o inflacji, ale sam wprowadza jeszcze więcej zamętu.

Są tutaj opinie słuszne: znaczna część inflacji jest spowodowana czynnikami zewnętrznymi;

https://twitter.com/gazetapl_news/status/1528678559887331329

stopy na lokatach z opóźnieniem reagują na ruchy RPP przez nadpłynność; ani rząd ani opozycja nie oferują rozwiązań, a przerzucanie się inflacyjnymi obelgami jest płytkie i tendencyjne.

The What if?… study on the effects of RU energy ban (below) was published on 7 March, 2 weeks after the start of this atrocious war.

A long-ish thread on (a) how incredible that is, and (b) how it’s been under-utilised by the policymakers. 1/20

https://twitter.com/kuhnmo/status/1500937765814517774

2/20 Just let that sink in: *2 weeks* into this war, German policymakers had on their desks a concise, lucid and detailed study of the economic effects of a policy tool (energy ban) that could actually make a difference in this war.

Putin is finding new ways to circumvent sanctions, while EU debate on 🇷🇺 energy ban is stuck

It's totally unsustainable

In a @ProSyn piece w @MSchularick we propose a way to break the deadlock -

forward guidance on sanctions: 1/7

project-syndicate.org/commentary/gra… In recent days, the ruble stabilized and then appreciated sharply.

RU govt bond yields have fallen back.

The consensus forecast for Russia GDP growth in 2022 stands at -8% – a sharp contraction, but hardly a collapse.

It's blatantly obvious we have not done enough. 2/7

The debate on 🇷🇺 oil & gas ban to #StopFundTheWar & #StandWithUkraine is important. 🇺🇦🌻

I put together a list of arguments against the ban, debunking them 1-by-1 (a "myth buster")

Hope it's constructive & useful 4 all involved.

PDF here:

dropbox.com/s/fvd59j8ksp2t…

16 myths: MYTH 1:We are not financing Putin’s war (b/c of sanctions, he cannot use the billions of euros/dollars we send him anyway).

FALSE: there’s no doubt that a ban would drastically limit the real resources available for war.

numbers: beyond-coal.eu/russian-fossil…

see links in the PDF

One *super basic* thing that has been missing from the 🇷🇺 oil & gas embargo econ debate is some PERSPECTIVE.

We have seen terms like "poverty", "huge impact", particularly in 🇩🇪 (a pivotal country, so I will focus on it).

To help with perspective, some v basic charts: 1/n First, 🇩🇪 annual GDP growth.

The red diamond is IMF fcast for '22, adjusted lower for the recent rise in energy prices.

The grey swathe is a range of embargo impact e.g. from @GoldmanSachs & @ben_moll @kuhnmo @MSchularick @BachmannRudi and others econtribute.de/RePEc/ajk/ajkp… 2/n

Another input into the energy imports embargo 🇩🇪 debate, now from @MonikaSchnitzer.

Unfortunately rather than the advertised "balanced and unexcited assessment of the tradeoffs" we get a bunch of gut feelings, unsubstantiated claims, and outright errors and misunderstandings.

https://twitter.com/MonikaSchnitzer/status/1502961087217606658

Gut feelings: "huge" economic impact. I don't deny there'll be a cost, perhaps significant. But w/o evidence or analysis, this is scaremongering.

Show us your model / assumptions / simulations / regressions / back of the envelopes

Can't stop thinking about this:

"Wir reden von Armut" - "We're talking about poverty"

said Robert Habeck, German vice chancellor and economic minister of economy and climate @BMWK

No, he was not reflecting on the fate of 2 million who have fled Ukraine in as many weeks, ...

https://twitter.com/ben_moll/status/1502372887109459971

clutching on to a plastic bag with what's left of their life's possessions.

He also wasn't talking about Mariupol's residents destined to die of starvation & dehydration, or shelling.

He was reflecting on the ~0.5-6% (I'm generous*) hit to annual GDP per capita in Germany, ...

📉UNEVEN GROWTH📈– Automation’s Impact on Income and Wealth Inequality, w @ben_moll @pascualrpo

A brand new & improved version of our paper out today @nberpubs:

nber.org/papers/w28440?…

Main idea + key results (thread): 🤖🧵

(tagging some whose great work we draw on🙏) What are the distributional consequences of shifts in technology? Who wins and who loses, and why?

Much has been said about the uneven impact of technology on wages of different workers (@davidautor, @lkatz42).

UNEVEN GROWTH: NEW PAPER [Thread] Over the past 4 decades, gains from growth have been very unevenly distributed. Why is that? In a new paper, Ben Moll @pascualrpo & I consider the role of automation in driving the rise in inequality, inc at the v top: princeton.edu/%7Emoll/UG.pdf 1/7 The key feature of our theory is that technology permanently affects rates of return. By raising return to capital automation results in rapid individual wealth accumulation and thus higher wealth inequality. This is related to @PikettyLeMonde 'r-g’ argument. 2/7