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Ben Moll Profile picture
Ben Moll
@ben_moll
Sir John Hicks Professor of Economics, @LSEecon. Macroeconomics with distribution(s).
Jun 28, 2024 • 24 tweets • 8 min read
How should we tax capital gains due to rising asset prices? On realization? On accrual? Or should we perhaps tax wealth?

The existing public finance literature has a big hole making it unsuitable for thinking about these issues: it doesn't model asset prices!

🧵 on a new paper: Image We “put the ‘finance’ into ‘public finance’”, meaning that we study optimal redistributive taxation with changing asset prices.

Joint work with Mark Aguiar and @Florian_Scheuer

Paper here:

Slides here: benjaminmoll.com/PFPF/
benjaminmoll.com/PFPF_slides/
Apr 29, 2024 • 5 tweets • 3 min read
🤓 Nerd tweet for the heterogeneous-agent macro crowd

You like sequence-space Jacobians? But you also like working in continuous time?

Then I have just the thing for you! 🤓

Two very nice recent papers and some code: Image 1. René Glawion's very nice continuous-time implementation of the @a_auclert @BardoczyBence Rognlie @ludwigstraub sequence-space method:
- “Sequence-Space Jacobians in Continuous Time”
- GitHub repository with codes papers.ssrn.com/sol3/papers.cf…
github.com/reneglawion/Se…
Image
Dec 14, 2023 • 5 tweets • 2 min read
New study on China decoupling using similar approach to our work on the Russian gas cut-off.

Punchline: our results provide a rationale for embarking on gradual de-risking trajectory to avoid a much more costly cold turkey decoupling dictated by geopolitical events

Here is why: 1. Cold-turkey decoupling would be costly: "financial crisis in short-run + Brexit in long-run" is good way of thinking about it. So costly though still not Armageddon.

2. More gradual decoupling or de-risking --> smaller costs because it avoids the most extreme short run losses
Sep 28, 2023 • 6 tweets • 4 min read
"The Power of Substitution: The Great German Gas Debate in Retrospect" with @MSchularick and @GeorgZachmann

Presentation tomorrow at 11:30am ET at @BrookingsEcon conference. Live stream brookings.edu/events/bpea-fa…

Draft: brookings.edu/wp-content/upl…

Slides: benjaminmoll.com/GGGD_slides/ Image This is another follow-up on our "What If?" paper with @BachmannRudi @DBaqaee @christianbaye13 @kuhnmo @andreasloeschel @APeichl #KarenPittel.

Now with a systematic analysis how Germany blunted Putin's energy weapon.

Jul 11, 2023 • 9 tweets • 6 min read
I taught a new undergraduate macroeconomics course @LSEEcon. Goals:

1. *Modern* macro = microfoundations rather than IS-LM

2. Simple enough that undergrads get it

3. But still end up somewhere reasonably close to research frontier

All materials here https://t.co/58z85Oa53hbenjaminmoll.com/lectures/


 Course description here

In case it's useful, e.g. for your own teaching: .zip file with all .tex files and figures etc so you can edit these notes yourself https://t.co/XJLQ2EB9fh https://t.co/2o08czNH8cbenjaminmoll.com/Syllabus_EC2B1…
benjaminmoll.com/EC2B1_Lecture_…
May 16, 2023 • 15 tweets • 5 min read
Here is my little Bob Lucas anecdote.

It's about Bob's incredible gift as a writer and his generosity toward his students.

It's the fall of 2009 and I'm a grad student at the University of Chicago. Bob is on my thesis committee. I've just finished a first draft of my job market paper with which I will be applying for assistant professor jobs. I've put *a ton* of work into the paper and I'm pretty happy with it overall. I email it to Bob asking whether he could take a look, hoping for some verbal comments
May 14, 2023 • 18 tweets • 11 min read
Given some of the reactions to this thread, let me remind you of some of the doomsday predictions around the time we wrote our original paper.

Our key message below is not: "everything is great in Germany". Instead it is: "those doomsday predictions were far off the mark." Here is a collection of some of the most extreme doomsday predictions. Two reasons:

- provide a benchmark to which to compare the substantial economic costs 🇩🇪 has seen

- the hope that the worst offenders (particularly those with ulterior motives) will lose some credibility
May 9, 2023 • 16 tweets • 5 min read
Just released: new study showing

1. The German economy coped well with end of Russian gas supplies even avoiding recession

2. Germany would have also withstood an earlier 1 April 2022 import stop

Joint with @MSchularick @GeorgZachmann @ECON_tribute

econtribute.de/RePEc/ajk/ajkp…Image A year after our "What If?" paper with @BachmannRudi @DBaqaee @christianbaye13 @kuhnmo @andreasloeschel @APeichl #KarenPittel we take stock of what actually happened using the latest data.

Oct 20, 2022 • 31 tweets • 14 min read
To complement @LionHirth's excellent explainer on the proposal of Germany's gas commission, here is a graphical illustration.

Below is the graph I want to get to in the end to make a few points. The thread below builds up to it slowly. My reason for taking another shot at explaining this: if people don't understand the policy, then it won't work as intended. So communication is key. Just as @R2Rsquared writes here.

Oct 20, 2022 • 9 tweets • 3 min read
Thanks for the detailed response on the 🇩🇪 gas commission's model @IsabellaMWeber.

I hate to be petty but the following is factually incorrect: "The [payment] cannot be derived without the non-linear pricing."

Here's how: The payment is

(past gas consumption in kWh)*(transfer per past kWh)

where

transfer per past kWh = (market price - guaranteed price)*80%

(So in this interpretation the 80% is simply the fraction of the price gap that's being compensated.)
Sep 8, 2022 • 11 tweets • 7 min read
First forecast for 🇩🇪 economy after Nordstream 1 shutdown.

GDP growth predicted by @kielinstitute:
- 2022: +1.4%
- 2023: -0.7%
- 2024: +1.7%

"Largest economic crisis since the end of WWII" with "millions of lost jobs" here we come!

*Brudermüller/Scholz

ifw-kiel.de/publications/m… .@kielinstitute's unemployment prediction: "The unemployment rate is expected to rise from 5.3 percent (2022) to 5.6 percent (2023) and then fall slightly to 5.5 percent (2024)."
Aug 15, 2022 • 20 tweets • 8 min read
Focusing on gas storage levels distracts from what really matters: saving gas! An analogy:

Gas storage is like a small water reservoir. This reservoir is fed by some large rivers (inflows) and balances a large, fluctuating water demand, say for showering & irrigation (outflows) Image The analogy is hopefully clear
- rivers = gas imports from abroad, largest river = Russia
- water demand = gas demand
- "small" & "large" are deliberate
Here are rough numbers for 🇩🇪 in past years, e.g. storage capacity = "only" consumption of 2 winter months --> inflows are key! Image
Aug 9, 2022 • 11 tweets • 4 min read
Deutschland ist zu sehr auf die Speicher-Füllstände fixiert.

Viel wichtiger: Gas sparen!

Faustregel:
- 1% Speicherstand bringt 0,3% weniger nötiges Sparen
- umgekehrt: 1% Sparen ist 3,5% Speicherstand wert

Sparen ist also quasi mehr als 3 mal so wichtig wie die Speicherstände. Herleitung der Faustregel am 🧵-Ende.

Hintergrund: 🇩🇪 muss über die nächsten 9 Monate bis Ende der Heizperiode genug Gas sparen dass am Ende die Speicher nicht leer sind

Jede Terawattstunde die heute im Speicher ist muss später nicht gespart werden. Aber wieviel macht das aus?
Jul 19, 2022 • 31 tweets • 18 min read
Over the last decades, many asset valuations have gone through the roof. This had large effects on the distribution of wealth.

But what does it mean for welfare? Was this a huge shift of resources toward the wealthy? Or just welfare-irrelevant "paper gains"?

🧵 on a new paper: The paper is joint work with @AndreasFagereng, Matthieu Gomez, Emilien Gouin-Bonenfant @BlomhoffHolm and @GNatvik

Paper here: benjaminmoll.com/APR/

Slides here: benjaminmoll.com/APR_slides/
Jul 18, 2022 • 9 tweets • 12 min read
Is economic modelling useful for guiding policy? Specifically epi-macro modeling during the pandemic?

UK Treasury chief economist Claire Lombardelli with a provocative take: "we could have constructed and estimated economic models all day long, and they would have been wrong" Source gov.uk/government/spe… HT @toxvaerd1

#EconTwitter what do you think? In particular, those of you who have developed and worked with these epi-macro models?

@IvanWerning @EichMartin @SergioRebelo6 @alvafer64 @VC31415 @jimstockmetrics @michaelmina_lab @TertiltMichele
Jul 15, 2022 • 66 tweets • 39 min read
Thread: a collection of concrete cases of substitution & demand reduction in the energy crisis.

Economic theory predicts that, as prices rise, households & firms reduce demand and substitute. We're starting to see more and more such cases

I'll collect these here as we go along. Background: EU countries must cut gas demand by substantial amounts, e.g. Germany by around 29%, to withstand a Russian gas cut-off. Other energy is getting scarcer as well.

Where might such demand reduction come from? And how costly will it be?

Image
Jun 25, 2022 • 41 tweets • 20 min read
Putin cutting gas to 🇩🇪 and other 🇪🇺 countries raises many important questions:

1. How to best dampen economic costs?

2. Given measures to date, will costs be smaller or larger than estimates from March/April?

3. What does this mean for Russia and the war?

A summary thread: The thread will focus on the German case with (warning!) lots of references in German.

But many of the points should also carry over to other countries, say Italy.

I will also draw heavily on what many smart colleagues have written elsewhere.
Jun 5, 2022 • 15 tweets • 9 min read
Excellent thread with intuitive explanations why people claiming energy sanctions won't affect Putin's ability to wage war in Ukraine either haven't thought things through or are arguing in bad faith.

1/ An example by @M_C_Klein: "Russia has lost access to many imports" and therefore "the oil boycott will hurt ordinary Europeans at least as much as it impairs Putin’s war effort. It should be understood mainly as a moral gesture rooted in self-denial"



2/
May 9, 2022 • 14 tweets • 8 min read
.@tom_krebs on a gas import stop: 1.6%*5 = 8%.

Only the 1.6% is @tom_krebs own number. The factor of 5 is from a totally different study from a totally different context (Fukushima).

Even the authors of the Fukushima study themselves say they would not make this calculation. Where does this "production multiplier" of 5 come from?

From an important paper on supply chain disruptions after Fukushima by Vasco Carvalho, Makoto Nirei, Yukiko Saito & Alireza Tahbaz-Salehi @QJEHarvard which indeed finds substantial amplification.

academic.oup.com/qje/article/13…
May 8, 2022 • 5 tweets • 3 min read
Selbst Teile der deutschen Industrie-Lobby denken dass ein #Ölembargo in 6 bis 8 Monaten zu langsam ist!

"Ölembargo ist richtig, muss aber schneller kommen" sagt der Maschinenbau-Verband @VDMAonline

vdma.org/viewer/-/v2art… "[Ein Ölembargo] ist überfällig und nötig. [...] Die geplante schrittweise Einführung bis zum Jahresende ist aber nicht ambitioniert genug. Wenn man die Einnahmequellen für Putins Kriegsmaschinerie effektiv treffen will, muss das Embargo wesentlich schneller greifen."
Apr 25, 2022 • 14 tweets • 9 min read
When people run out of arguments, they start saying things that aren't quite true.

Here is the Head of the Scholz Chancellery @W_Schmidt_ talking about our work on an import stop of Russian energy and this is exactly what happens

around min 26:00

1/ The @ZEITstiftung panel, also featuring @fromTGA @HalynaYanchenko @AbaziHaki & moderated by @AslanTV, is well worth watching

@fromTGA mentions our paper "It would cost a lot, maybe 2-3% of GDP, but it’s doable"

@W_Schmidt_ then says a few things we would like to react to.

2/