Dirk Niepelt

Die Volkswirtschaft, 24 July 2020. PDF. Clarifying the connections between outright monetary financing, QE, the distribution of seignorage profits, the relationship between fiscal and monetary policy, and central bank independence. Abstract: Wenn Parlamentarier höhere Gewinnausschüttungen der Nationalbank fordern, Kritiker im Euroraum mehr «Quantitative Easing» oder Helikoptergeld verlangen und andere Stimmen monetäre Staatsfinanzierung monieren, dann steht die Beziehung zwischen...

Economic Journal, forthcoming, with Harris Dellas. PDF. We study the optimal debt and investment decisions of a sovereign with private information. The separating equilibrium is characterized by a cap on the current account. A sovereign repays debt amount due that exceeds default costs in order to signal creditworthiness and smooth consumption. Accepting funding conditional on investment/reforms relaxes borrowing constraints, even when investment does not create collateral, but it...

A new report by the Committee on Payments and Market Infrastructures lists 7 types of frictions and 19 focus areas to address these frictions.

In its annual economic report, the BIS further warms to the idea that CBDC is a key part of central banks’ response to financial innovation. Central banks play a pivotal role in maintaining the safety and integrity of the payment system. They provide the solid foundation by acting as guardians of the stability of money and payments. The pandemic and resulting strain on economic activity around the world have confirmed the importance of central banks in payments. Digital innovation is...

On Alphaville, Claire Jones and Izabella Kaminska discuss privacy issues related to CBDC. In the background, Kocherlakota’s “Money is Memory” is lurking.

VoxEU, June 22, 2020. HTML. Is macroeconomics useful? Of course. To make the point, academics must regain the interpretative high ground from market commentators. While it helps when policymakers understand fundamental macroeconomic concepts, it is equally important for the general public to grasp them. More, and how this relates to the new textbook, on VoxEU.

Stonehenge is tiny. Dalya Alberge reports in the Guardian.

Quality, not subject or object, as the elementary fabric. ἀρετή. A rehabilitation of the sophists. Some quotes: If the purpose of scientific method is to select from among a multitude of hypotheses, and if the number of hypotheses grows faster than experimental method can handle, then it is clear that all hypotheses can never be tested. If all hypotheses cannot be tested, then the results of any experiment are inconclusive and the entire scientific method falls short of its goal of...

Discussion of Antonio Fatás’ chapter in Elena Carletti, Stijn Claessens, Antonio Fatás, Xavier Vives, The Bank Business Model in the Post-Covid-19 World, CEPR/IESE report, London, June 2020. PDF. Antonio’s chapter offers a rich overview of the dramatic changes in the world of money and banking that we have seen in recent years. I focus on two themes: the nature of money and how it relates to these developments, and the government’s response to the structural changes we observe. I...

By Koen Swinkels, on Medium, a database and preliminary interpretation subject to various caveats. The preliminary suggested interpretation is as follows: Nearly all SSEs in the database — more than 97% — took place indoors The great majority of SSEs happened during flu season in that location The vast majority took place in settings where people were essentially confined together, indoors, for a prolonged period (for example, nursing homes, prisons, cruise ships, worker housing)...