When a central bank introduces a central bank digital currency, it may lead to an erosion of deposits as the stable funding base of banks and result in challenges regarding the asset side of the central bank. We study the resulting economy and tradeoffs in a stylized nominal version of the...

When a central bank introduces a central bank digital currency, it may lead to an erosion of deposits as the stable funding base of banks and result in challenges regarding the asset side of the central bank. We study the resulting economy and tradeoffs in a stylized nominal version of the...

This paper analyzes dynamic equilibrium risk sharing contracts between profit-maximizing intermediaries and a large pool of ex-ante identical agents that face idiosyncratic income uncertainty that makes them heterogeneous ex-post. In any given period, after having observed her income, the agent...

We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of 2009. We extend the benchmark Smets-Wouters (Smets and Wouters, 2007) New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital and distortionary...

Am 11. und 12. Juni 2013 hat das Bundesverfassungsgericht Experten zur Krisenpolitik der EZB angehört. Dabei ging es um die Frage, ob oder inwieweit die EZB durch das Outright-Monetary-Transactions-Programm (OMT) Kompetenzen beansprucht, die ihr nicht übertragen worden sind. Wir...

In this paper, I investigate the scope of a model with exogenous habit formation - or 'catching up with the Joneses', see Abel (1990) - to generate the observed equity premium as well as other key macroeconomic facts. Along the way, I derive restrictions for four out of eight parameters for a...

Mit Beginn des Jahres 2010 hat das große Haare-raufen begonnen. Griechenland ist nahe am Staatsbankrott. In den USA mehren sich die Stimmen, die furchtsam auf die sich aufblähenden Staatsschulden aufmerksam machen. Auch in Europa hat der Kater nach den Stimulusbeschlüssen eingesetzt. Wer soll...

Interbank money markets have been subject to substantial impairments in the recent decade, such as a decline in unsecured lending and substantial increases in haircuts on posted collateral. This paper seeks to understand the implications of these developments for the broader economy and monetary...

Based on high frequency identification and other econometric tools, we find that monetary policy shocks had a significant impact on the health of euro area banks. Information effects, which made the private sector more pessimistic about future prospects of the economy and the profitability of...

This paper investigates the effects of interbank rate uncertainty on lending rates to euro area firms. We introduce a novel measure of interbank rate uncertainty, computed as the cross-sectional dispersion in interbank market rates on overnight unsecured loans. Using proprietary bank-level data,...