Researcher, macroeconomist, Bundesbank.
All views are my own personal opinions and do not reflect the opinion of the Bundesbank, the Eurosystem, or its staff.
Jul 3, 2024 • 11 tweets • 3 min read
I'm not going to be cool about this. This is a huge deal for me. I still can't believe it's real.
I've somehow rolled this Trojan horse of a paper past the gates of the Top 5.
Under its nerdy exterior hides answers to some of the most fundamental question of monetary econ. 1/
For example: How does monetary policy work?
The standard "demand" answer goes via the real rate.
I argue that this is at best a secondary channel.
In our models, monetary policy primarily works as it does under flexible prices, through the Fisher equation. 2/
Dec 9, 2023 • 4 tweets • 2 min read
The basic NK model is more in line with the data than John suggests.
John writes: "The basic sign is wrong—or at least counter to the standard belief of all policy makers. In the model, higher interest rates cause inflation to jump down immediately, & then rise over time." 1/4
He continues: "Everyone at the Fed uniformly believes that higher interest rates cause inflation to go nowhere immediately, and then gently decline over time, with 'long and variable lags'."
Modern methods of identifying monetary policy shocks do not support this view. 2/4
Jul 1, 2019 • 15 tweets • 3 min read
Is the forward guidance puzzle actually puzzling? Thread follows. (Prompted by a session at SCE CEF 2019. Warning: written while very jet lagged!) 1/
The forward guidance "puzzle" refers to the large impact of an unconditional commitment to hold interest rates at zero for longer than under usual behaviour (e.g. under the rule). To make this puzzling, it is normally presented as follows: 2/
