My written statement for 20minuten:
Anlageverluste der SNB sind schlecht für den Schweizer Steuerzahler, denn ihm gehört die SNB. Sie können aber auch Entwicklungen widerspiegeln, die ihre guten Seiten haben. Jetzt zum Beispiel führt die Frankenstärke zu Anlageverlusten, bremst aber auch die importierte Inflation.
Die Diskussion um die Höhe der SNB-Ausschüttungen ist vielfach fehlgeleitet. In der Debatte geht vergessen, dass Gewinnausschüttungen das Reinvermögen von Bund und Kantonen nicht verändern. Denn Ausschüttungen sind keine Transfers von Dritten an Bund oder Kantone – sie tauschen lediglich eine Aktivposition in der Bilanz von Bund oder Kantonen gegen eine andere aus, wie bei einer Dividendenausschüttung eines Unternehmens. Die Hauptwirkung von

My written statement for 20minuten:
Anlageverluste der SNB sind schlecht für den Schweizer Steuerzahler, denn ihm gehört die SNB. Sie können aber auch Entwicklungen widerspiegeln, die ihre guten Seiten haben. Jetzt zum Beispiel führt die Frankenstärke zu Anlageverlusten, bremst aber auch die importierte Inflation.
Die Diskussion um die Höhe der SNB-Ausschüttungen ist vielfach fehlgeleitet. In der Debatte geht vergessen, dass Gewinnausschüttungen das Reinvermögen von Bund und Kantonen nicht verändern. Denn Ausschüttungen sind keine Transfers von Dritten an Bund oder Kantone – sie tauschen lediglich eine Aktivposition in der Bilanz von Bund oder Kantonen gegen eine andere aus, wie bei einer Dividendenausschüttung eines Unternehmens. Die Hauptwirkung von Ausschüttungen ist, dass sie

How are SNB profits and losses distributed and what issues are debated?
Annual Result Funds two “Reserves”
The annual result (Jahresergebnis) of the Swiss National Bank (SNB) is split into two parts. The first part funds “provisions for currency reserves” (Zuweisungen an Rückstellungen für Währungsreserven) which are meant to provide a buffer against future losses on the SNB’s asset positions. The second part funds current and future profit distributions to the Confederation and cantons (Ausschüttungen an Bund und Kantone) and dividend payments to SNB shareholders. The ad hoc announcement regarding the SNB’s 2021 annual result (English, German) provides an overview.
Allocation Rules
The SNB decides how the annual result is split, subject to some guidance in the

How are SNB profits and losses distributed and what issues are debated?
Annual Result Funds two “Reserves”
The annual result (Jahresergebnis) of the Swiss National Bank (SNB) is split into two parts. The first part funds “provisions for currency reserves” (Zuweisungen an Rückstellungen für Währungsreserven) which are meant to provide a buffer against future losses on the SNB’s asset positions. The second part funds current and future profit distributions to the Confederation and cantons (Ausschüttungen an Bund und Kantone) and dividend payments to SNB shareholders. The ad hoc announcement regarding the SNB’s 2021 annual result (English, German) provides an overview.
Allocation Rules
The SNB decides how the annual result is split, subject to some guidance in the National Bank Law (NBG,

Journal of Economic Dynamics and Control, July 2022, with Martin Gonzalez-Eiras. PDF (local copy).
We investigate how politico-economic factors shaped government responses to the spread of COVID-19. Our simple framework uses epidemiological, economic and politico-economic arguments. Confronting the theory with US state level data we find strong evidence for partisanship even when we control for fundamentals including the electorate’s political views. Moreover, we detect an important role for the proximity of elections which we interpret as indicative of career concerns. Finally, we find suggestive evidence for complementarities between voluntary activity reductions and government imposed restrictions.

Leitwolf 008, May 2022. HTML, PDF, Video.

Is it a default? Discussions in NZZ and FT.

Central banking after the pandemic: challenges ahead
This year’s conference focused on the question of how central banks can meet their mission to preserve the value of money. The sessions focused on inflation – the containment of which is an important aspect of preserving money’s value – as well as preserving the value of money from the longer-term, structural perspective, focusing on the challenges of digital innovation.
Program

Der diesjährige Preis der Schweizerischen Gesellschaft für Volkswirtschaft und Statistik geht an Hansueli Schöchli. Pressemitteilung.

Le prix de cette année de la Société suisse d’économie et de statistique est décerné à Hansueli Schöchli. Communiqué de presse.

Il premio di quest’anno della Società svizzera di economia e di statistica va a Hansueli Schöchli. Comunicato stampa.

This year’s prize of the Swiss Society of Economics and Statistics goes to Hansueli Schöchli. Press release.

4th IFAWG Meeting — G20 Side Event on Macro-Financial Implications of CBDC, Bali

Interview in NZZ with the leader of the palliative care section at the University of Zurich’s childrens’ hospital:
Wie sprachen [Kinder] darüber [ihre Ahnung, bald sterben zu müssen]?
Ein Kind sagte, es müsse zwei Koffer packen. Den einen nehme es auf seine Reise mit, den anderen lasse es zu Hause, damit es nicht vergessen werde. Ein anderes wollte auf einem Besen in den Himmel reiten. Ich habe auch schon ein kleines Kind erlebt, das kaum sprach und plötzlich zu seinen Eltern sagte, wie lieb es sie habe. Das war unglaublich berührend. Im Moment, als es das sagte, war der Satz noch nicht als Zeichen der Verabschiedung deutbar. Manchmal merken wir erst im Rückblick, dass das Kind gespürt hat, was kommt.
Was sagen Sie, wenn ein Kind Sie fragt, ob es bald sterben werde?
Das werde ich

By Axel Leijonhufvud, September 1973, Economic Inquiry.

The Econ tribe occupies a vast territory in the far North. Their land appears bleak and dismal to the outsider, and travelling through it makes for rough sledding; but the Econ, through a long period of adaptation, have learned to wrest a living of sorts from it. They are not without some genuine and sometimes even fierce attachment to their ancestral grounds, and their young are brought up to feel contempt for the softer living in the warmer lands of their neighbours, such as the Polscis and the Sociogs. Despite a common genetical heritage, relations with these tribes are strained -the distrust and contempt that the average Econ feels for these neighbours being heartily reciprocated by the latter- and social intercourse with

Tom Sargent describes how he learnt macroeconomics the Lucas way, starting from the Cowles Commission approach and digesting Muth’s (or Richardson’s?) rational expectations.

Schweizer Monat, April 2022, with Markus Brunnermeier. PDF.
We describe challenges the digital money revolution poses for central banks and predict that more and more monetary authorities will introduce CBDCs.

An executive order dated March 9, 2022 outlines what is on the White House’s mind:
The United States has an interest in responsible financial innovation, expanding access to safe and affordable financial services, and reducing the cost of domestic and cross-border funds transfers and payments, including through the continued modernization of public payment systems.  We must take strong steps to reduce the risks that digital assets could pose to consumers, investors, and business protections; financial stability and financial system integrity; combating and preventing crime and illicit finance; national security; the ability to exercise human rights; financial inclusion and equity; and climate change and pollution. …
(d)  We must reinforce United States leadership in the global

Henley & Partners lists what is costs.
A growing number of countries host residence and citizenship by investment programs (also known as golden visa programs) that offer a variety of attractive investment options designed to cater to each family’s unique requirements. In an unsettled, ever-changing world, wealthy individuals need a plan B for themselves and their families — one that offers them a safer place to live in times of crisis, while also providing them with greater access to global business and lifestyle opportunities.

I supervise theses that focus on macroeconomic questions, use models to answer them, and are written in English or German. If you are interested in writing your thesis with me please follow these steps:
Contact me by e-mail to check whether I can act as your thesis supervisor. Attach your grade sheet and sketch very briefly what type of questions you are interested in. 
Once we have agreed that I act as supervisor prepare a one- or two-page proposal outlining as concisely and precisely as possible, what your research question is; what kind of model you plan to use in order to answer the question; and what kind of results you anticipate.
We will discuss your proposal and you might revise it until we have a common understanding of the research question and the strategy to answer it. We

In a speech, the ECB’s Fabio Panetta argues that a digital Euro is necessary because
[i]n the digital age … banknotes could lose their role as a reference value in payments, undermining the integrity of the monetary system. Central banks must therefore consider how to ensure that their money can remain a payments anchor in a digital world.
He argues that
outsourcing the provision of central bank money [to stable coin providers] … would endanger monetary sovereignty [as would the absence of a national digital currency].
Panetta also argues that a digital Euro could
improve the confidentiality of digital payments and
increase choice and reduce costs
and should
avoid interfering with the functioning of the financial system and
be available within private payment solutions.
Panetta does

Neue Zürcher Zeitung, February 17, 2022. PDF.
The federal council’s digital finance strategy focuses on regulation.
There are limits to this strategy when financial markets operate globally and virtually.
Preserving monetary sovereignty requires an attractive national currency.
Carrots, not only sticks.
An attractive currency is not only stable but also usable in digital form.

CEPR and SUERF webinar moderated by me. Markus Brunnermeier and Jean-Pierre Landau present their report for the European Parliament. Youtube.

Goodreads rating 4.19.
A sweeping novel of 950 pages (!) which starts on page 960. The Nobel laureate describes hundreds of characters, with even more names; immerses in countless locations, languages, and creeds. Her protagonists always remain strangers.
There is something wonderful in being a stranger, in being foreign, something to be relished, something as alluring as candy. It is good not to be able to understand a language, not to know the customs, to glide like a spirit among others who are distant and unrecognizable. Then a particular kind of wisdom awakens—an ability to surmise, to grasp the things that aren’t obvious. Cleverness and acumen come about. A person who is a stranger gains a new point of view, becomes, whether he likes it or not, a particular type of sage. Who was

The new edition features an interview with Javier Bianchi. PDF.
It is “my” last Newsletter since I left the Center yesterday.

On the question whether the Fed should seriously consider retail CBDC, the FT sides with the pro camp.

While elsewhere such central bank digital currencies can appear “a solution in search of a problem”, America’s lacklustre retail banking system and the importance of the dollar in cross-border money flows make an obvious case for reform.

Compare the contributions by Darrell Duffie and Chris Waller in the CEPR eBook.

CEPR Discussion Paper 16906, January 2022, with Martin Gonzalez-Eiras. PDF (local copy).
We investigate how politico-economic factors shaped government responses to the spread of COVID-19. Our simple framework uses epidemiological, economic and politico-economic arguments. Confronting the theory with US state level data we find strong evidence for partisanship even when we control for fundamentals including the electorate’s political views. Moreover, we detect an important role for the proximity of elections which we interpret as indicative of career concerns. Finally, we find suggestive evidence for complementarities between voluntary activity reductions and government imposed restrictions.
Forthcoming in the JEDC.

Wirtschaft Regional, January 7, 2022. PDF.
Interview on private and public money, digital payments, Bitcoin, cash.

Wirtschaft Regional, January 7, 2022. PDF.
Interview on private and public money, digital payments, Bitcoin, cash.

Blog post by Dave Peck and the PSL team. Some issues they discuss:
Very few categories of data belong on-chain …
Today’s smart contract programming models are deeply flawed …
Smart contracts can’t reference the “real-world”. They can only reference the blockchain itself. This is known as the “oracle problem” and it makes blockchains a necessarily closed system. This may sound like a trivial problem, but it is actually profound. For instance, it forces smart contract developers to jump through hoops to build “price oracles” when they want their on-chain code to reference real-world asset prices. Companies like Chainlink act as oracles,
Smart contracts can’t be upgraded …
Smart contracts require complex distributed systems to run, effectively, forever.
Distributed consensus technology

BA seminar at the University of Bern.
Uni Bern’s official course page:
The seminar targets students who have completed their mandatory training in microeconomics, macroeconomics and mathematics (i.e., students in the second half of their BA studies) and who are interested in modern macroeconomic theory.
We analyze arguments according to which the government does, or does not face an intertemporal budget constraint. What does the literature on asset pricing, rational bubbles, or the fiscal theory of the price level have to say? Why does the difference between the interest rate and the growth rate matter? Does “Modern Monetary Theory” add anything to these insights?
We start by reviewing standard economic models (c. 3 classes). Thereafter, students read contributions to the literature,

BA course at the University of Bern.
Uni Bern’s official course page:
The course targets students who have completed their mandatory training in microeconomics, macroeconomics and mathematics (i.e., students in the second half of their BA studies) and who are interested in modern macroeconomic theory. The objective of the course is threefold: Students should learn to think analytically, like economists do; they should understand select tools of modern macroeconomic theory; and they should learn to apply the tools and the economic reasoning to frame and understand policy issues in Switzerland and beyond.
We start by discussing a couple of macroeconomic policy topics at the level a newspaper would cover them. Based on this review we identify topics that are of most interest to the

MA course at the University of Bern.
Uni Bern’s official course page:
This course covers macroeconomic theories of fiscal policy (including tax and debt policy) and the interaction between fiscal and monetary policy. Participants should be familiar with the material covered in the course Macroeconomics II. The course grade reflects the final exam grade.
Monday, 12.15 – 14.00 h
1st exam: Monday, May 30, 2022, 12.15 – 14.00h
2nd exam: Monday, September 12, 2022, 12.15 – 14.00h
The classes follow selected chapters in the textbook Macroeconomic Analysis (MIT Press, 2019) and build on the material covered in the macro II course which follows the same text. Table of contents of the book. Page with more information about the book and exercises.
Main contents:
Concepts.
RA model with