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Dirk Niepelt

Dirk Niepelt

Dirk Niepelt is Director of the Study Center Gerzensee and Professor at the University of Bern. A research fellow at the Centre for Economic Policy Research (CEPR, London), CESifo (Munich) research network member and member of the macroeconomic committee of the Verein für Socialpolitik, he served on the board of the Swiss Society of Economics and Statistics and was an invited professor at the University of Lausanne as well as a visiting professor at the Institute for International Economic Studies (IIES) at Stockholm University.

Articles by Dirk Niepelt

“Fiscal and Monetary Policies,” Bern, Spring 2018

5 days ago

MA course at the University of Bern.
The classes follow chapters 11–13 in this text and build on the material covered in chapters 1–5. Uni Bern’s official course page. The course TA is Christian Myohl.
Main contents:
Concepts.
RA model with government spending and taxes.
Government debt in RA model.
Government debt and social security in OLG model.
Neutrality results.
Consolidated government budget constraint.
Fiscal effects on inflation. Game of chicken.
FTPL. Active and passive policies.
Primal and dual approach.
Tax smoothing.
Time consistent policy.

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ECB Bond Purchases: Fiscal or Monetary Policy?

9 days ago

In an NBER working paper, Arvind Krishnamurthy, Stefan Nagel, and Annette Vissing-Jorgensen analyze which components of bond yields were affected by the European Central Bank’s government bond purchasing programs.
Given the institutional restrictions on monetary policy in the Euro area, the ECB had to carefully argue why it intervened in the first place. (To many, the case was obvious; the ECB intervention amounted to quasi-fiscal policy. But an intervention with this objective would not be covered by the rules of the Euro area.) It gave two reasons for the SMP, OMT, and LTRO:

The ECB has publicly stated that these policies reduce redenomination risk, i.e., the risk that the Eurozone might break up and countries redenominate domestic debt into new domestic currencies, and financial

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Cost Pressure Flattens Bank Hierarchies

13 days ago

In the NZZ, Daniel Imwinkelried reports about the effect of cost pressure on the organizational structure of banks: fewer layers of control.
So bestand das Schweizer Privatkundengeschäft der Credit Suisse (CS) bis vor kurzem aus drei Ebenen, nämlich zehn Regionen, den Marktgebieten und den Teams. Die mittlere Stufe wurde abgeschafft, die ehemaligen Chefs mussten die Bank verlassen oder erhielten eine neue Aufgabe. Im Schweizer Privatkundengeschäft der CS kamen einst im Durchschnitt auf einen Vorgesetzten 4,2 Mitarbeiter; nun strebt die Bank ein Verhältnis von 1 zu 7 an. Damit ziele man auf eine schlagkräftigere Führung, sagte jüngst Serge Fehr, der Leiter des Privatkundenbereichs, an einem Anlass.

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Cybersecurity

22 days ago

At an MIT book launch in Zurich, David Shrier and Alex Pentland advertized a new book co-edited by them, “New Solutions for Cybersecurity.” Some takeaways from the event:
The really dangerous cyber attacks are yet to come.
All major governments are directly or indirectly involved.
A promising strategy of minimizing risks relies on (i) continuous encryption; (ii) no central storage of data but case by case requests for data; and (iii) log queries to manage/monitor access.
The European General Data Protection Regulation is helpful.
Cybersecurity is big business.

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Price Effects of Purchases of Greek Sovereign Debt by the ECB

22 days ago

In a CEPR discussion paper, Christoph Trebesch and Jeromin Zettelmeyer argue that
ECB bond buying had a large impact on the price of short and medium maturity bonds … However, the effects were limited to those sovereign bonds actually bought. We find little evidence for positive effects on market quality, or spillovers to close substitute bonds, CDS markets, or corporate bonds.
A multiple equilibria view of the crisis would probably suggest otherwise.

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Konstanz and Kreuzlingen

January 19, 2018

In the NZZ, Monica Rüthers writes about the history of the border between Konstanz (in Germany) and Kreuzlingen (in Switzerland).
Shoppers have been crossing the border for ages although governments have tried to prevent this with varying fervor. Exchange rate regimes have affected which goods are bought, where.

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SNB Rejects Vollgeld and Questions ‘Reserves for All’

January 17, 2018

In the NZZ, Peter Fischer reports that SNB president Thomas Jordan rejects the Vollgeld initiative and stops short of endorsing the ‘reserves for all’ proposal.

… wehrt sich die Nationalbank auch gegen Vorschläge aus akademischen Kreisen, die von der Nationalbank fordern, nicht mehr nur Banken, sondern auch direkt den Schweizer Bürgern elektronisches Zentralbankgeld zur Verfügung zu stellen. Am einfachsten ginge dies, wenn jedermann bei der SNB ein Konto halten könnte. Jordan warnt davor, dass in einem solchen Fall die bewährte Arbeitsteilung zwischen Privatsektor und Zentralbank zur Disposition stünde. Die Fähigkeit der Banken, Kredite zu vergeben und Fristentransformation zu betreiben, würde eingeschränkt. Das

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SNB Rejects Vollgeld and Questions ‘Reserves for All’

January 17, 2018

In the NZZ, Peter Fischer reports that SNB president Thomas Jordan rejects the Vollgeld initiative and stops short of endorsing the ‘reserves for all’ proposal.

… wehrt sich die Nationalbank auch gegen Vorschläge aus akademischen Kreisen, die von der Nationalbank fordern, nicht mehr nur Banken, sondern auch direkt den Schweizer Bürgern elektronisches Zentralbankgeld zur Verfügung zu stellen. Am einfachsten ginge dies, wenn jedermann bei der SNB ein Konto halten könnte. Jordan warnt davor, dass in einem solchen Fall die bewährte Arbeitsteilung zwischen Privatsektor und Zentralbank zur Disposition stünde. Die Fähigkeit der Banken, Kredite zu vergeben und Fristentransformation zu betreiben, würde eingeschränkt. Das Finanzsystem würde als Ganzes nicht sicherer, sondern unter Umständen

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Oligopolistic Anonymity

January 17, 2018

On Alphaville, Kadhim Shubber reports that just a few marketplaces handle the vast majority of illicit drugs-vs.-bitcoin trades.
In short, the illicit bitcoin ecosystem is centered around a small number of services that could be subject to scrutiny, regulation and co-option by law enforcement.
It’s a wild west, but luckily for the police all the bad guys are hanging out at a single saloon.

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Doing Business, and Politics

January 13, 2018

The World Bank’s Doing Business project claims to provide
objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level.
In the Wall Street Journal, Josh Zumbrun and Ian Talley report that the ranking must be revised.
Over time, World Bank staff put a heavy thumb on the scales of its report by repeatedly changing the methodology that was used to calculate the country rankings, Mr. Romer said.
The focus of the World Bank’s corrections will be changes that had the effect of sharply penalizing the ranking of Chile under the most recent term of Chile’s outgoing president, Michelle Bachelet.
Paul Romer, the World Bank’s chief economist, apologized.

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“Nobel Prize-Winning Contributions to Economics”

January 13, 2018

Economics is not about predicting stock markets, exchange rates, or GDP. Its aim is to make sense of human interaction in the small and the large.
Marek Hlavac’s online course Nobel Prize-Winning Contributions to Economics provides an overview over the work of deep economic thinkers.

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iGen

January 8, 2018

In the FT, Leslie Hook reports that activist investors want Apple
to address concerns over smartphone addiction and the mental health effects of phone use among children.
They refer to psychologist Jean Twenge according to whom teenagers today (“the iGen”)
… are more vulnerable than Millennials were: Rates of teen depression and suicide have skyrocketed since 2011. It’s not an exaggeration to describe iGen as being on the brink of the worst mental-health crisis in decades. Much of this deterioration can be traced to their phones. …
12th-graders in 2015 were going out less often than eighth-graders did as recently as 2009. …
Teens who spend more time than average on screen activities are more likely to be unhappy, and those who spend more time than average on nonscreen activities are

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Inequality in the United States

January 8, 2018

… meanwhile, inequality in the US remains more of an issue.
On Alphaville, Kadhim Shubber summarizes a DB Global Markets Research study on US inequality:
More than 30% of US households have zero or negative non-home wealth.
Wealth is increasingly concentrated among the old, and among the wealthy.
Observers paint the picture of an increasingly dysfunctional society.
And they point to the relevance of inequality for political polarization and accountability.

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Inequality in Switzerland

January 8, 2018

In a paper, Reto Föllmi and Isabel Martínez document trends in income and wealth inequality in Switzerland over the last 100 years.
Daniel Hug reports in the NZZaS (figures below taken from NZZaS).
Data (World Wealth and Income Database, based on tax records).
Some findings:
Income inequality has been rather stable and is modest …
… although social mobility as reflected in educational attainment is low.
Income inequality at the very top has increased.
The top 1% of income recipients earn at least CHF 300 000 annually (net income before tax), the top 0.01% at least CHF 4 million.
Wealth is distributed much more unequally. The top 1% own roughly 40%, slightly more than in the United States and twice as much as in France and the UK.
The wealth distribution is more equal if retirement

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Swiss Perfectionism

December 18, 2017

In Der Bund, Adrian Sulc comments on the Swiss National Bank’s perfectionism.
Keine andere Schweizer Organisation kommuniziert so professionell wie die SNB, keine andere Organisation kann so gut dichthalten.
Perfectionism is costly.
Der Personalbestand ist in den letzten fünf Jahren um 18 Prozent auf 795 Vollzeitstellen gestiegen. … Die durchschnittlichen Lohnkosten pro Mitarbeiter betragen mittlerweile 155 000 Franken pro Jahr. Dies weil gemäss Nationalbank fast ausschliesslich Spezialisten aus Wirtschaft und IT eingestellt wurden.

Kostensteigerung bei der SNB, 2006 – 2016 – Click to enlarge

Related posts: Jim Grant: “Markets Trust Too Much In

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“Regulierung und Wettbewerb (Regulation and Competition),” FuW, 2017

December 15, 2017

Finanz und Wirtschaft, December 13, 2017. PDF. Ökonomenstimme, December 15, 2017. HTML.
Regulation is about aligning private and social trade-offs.
When banks cause negative externalities, good regulatory interventions increase banks’ costs.
Externalities may differ across countries, so nothing suggests that regulation induced costs should be the same internationally.

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Regulierung und Wettbewerbsfähigkeit

December 15, 2017

In der Finanzbranche gibt es zehn Jahre nach Beginn der Finanzkrise lauter werdende Rufe nach weniger Regulierung. Berechtigt ist die Kritik dort, wo diese nicht am Kern des Problems ansetzt und externe Effekte internalisiert, sondern wo sie Geschäftsmodelle, Produkte und Produktionsprozesse direkt zu verändern versucht. Weitaus weniger berechtigt ist die Kritik an der Bankenregulierung allerdings dort, wo sie die Kosten der Regulierung und die verschlechterte Wettbewerbsfähigkeit der betroffenen Unternehmen zum Gegenstand hat.
Im Finanzbereich gibt es zehn Jahre nach Beginn der Finanzkrise lauter werdende Rufe nach weniger Regulierung.[ 1 ]
Berechtigt ist die Kritik dort, wo Regulierung nicht am Kern des Problems ansetzt und externe Effekte internalisiert, sondern wo sie

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Swiss Perfectionism

December 13, 2017

In Der Bund, Adrian Sulc comments on the Swiss National Bank’s perfectionism.
Keine andere Schweizer Organisation kommuniziert so professionell wie die SNB, keine andere Organisation kann so gut dichthalten.
Perfectionism is costly.
Der Personalbestand ist in den letzten fünf Jahren um 18 Prozent auf 795 Vollzeitstellen gestiegen. … Die durchschnittlichen Lohnkosten pro Mitarbeiter betragen mittlerweile 155 000 Franken pro Jahr. Dies weil gemäss Nationalbank fast ausschliesslich Spezialisten aus Wirtschaft und IT eingestellt wurden.

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Blockchain Based Equity Settlement in Australia

December 8, 2017

In the FT, Jamie Smyth reports that the Australian Securities Exchange plans to introduce a blockchain based equity clearing and settlement system.
ASX will operate the system on a secure private network with known participants. The participants must comply with regulation, according to the ASX, which said its system had nothing to do with blockchain technology deployed by cryptocurrencies such as bitcoin.

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Cash Demand

December 6, 2017

On VoxEU, Clemens Jobst and Helmut Stix argue that
… cash balances for transactions comprise only a modest share of overall cash demand (a rough estimate of 15% might be a good guess across richer economies). … changes in currency in circulation are dominated by motives like hoarding. While transaction demand is reasonably well researched … still too little is known about non-transaction demand in general, and recent increases in particular.

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Forecasting In Finance

November 25, 2017

It’s the time of the year when financial advisors feel obliged to produce forecasts for the coming year. This is often a waste of time, for the writers and the readers.
In the Wall Street Journal, James Mackintosh writes that
[f]orecasting is difficult, but this year showed exactly how pointless it can be: Markets performed opposite of virtually all predictions.
Previous blog post.

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Laptops in Class Hinder Learning

November 25, 2017

In the New York Times, Susan Dynarski argues that students learn less when they use laptops, tablets and the like during lectures.
… a growing body of evidence shows that over all, college students learn less when they use computers or tablets during lectures. They also tend to earn worse grades. The research is unequivocal: Laptops distract from learning, both for users and for those around them. It’s not much of a leap to expect that electronics also undermine learning in high school classrooms or that they hurt productivity in meetings in all kinds of workplaces.
She points to studies arguing that “laptop note takers’ tendency to transcribe lectures verbatim rather than processing information and reframing it in their own words is detrimental to learning” and “multitasking on a

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Geldschöpfung “aus dem Nichts”

November 20, 2017

Auf der Ökonomenstimme läuft die Diskussion über das "Geld aus dem Nichts" bereits seit ein paar Monaten. Nicht zuletzt aufgrund der Vollgeldinitiative in der Schweiz wird nun auch ausserhalb von VWL-Kreisen verstärkt über die Geldschöpfung privater Geschäftsbanken diskutiert. Dieser Beitrag weist darauf hin, dass im Prinzip jedermann Geld schöpfen kann, dass das durch Banken geschöpfte Geld  jedoch (noch) besonderes Vertrauen geniesst, das im Zweifelsfall mit staatlicher Unterstützung gesichert werden muss.
Die Debatte um die
Vollgeldinitiative hat ein Thema in das Zentrum der öffentlichen Diskussion
gerückt, das bis vor kurzem neben wenigen Wissenschaftlern nur VWL-Studenten in
Einführungsvorlesungen beschäftigte: Die Geldschöpfung im Bankensystem.[ 1 ]
Weithin
bekannt ist,

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