Dirk Niepelt

In 12 Rules for Life, Jordan Peterson argues for the kind of values instilled by a socially conservative parental home: Aim for paradise, but concentrate on today. Meaning is key, not happiness. Assume responsibility. Listen carefully, speak clearly, and tell the truth. And stand straight, even in the face of adversity. Here they are, Peterson’s 12 rules: Stand up straight with your shoulders back Treat yourself like you would someone you are responsible for helping Make friends with...

In an NBER working paper, James Stock and Mark Watson argue that the correlation between cyclically sensitive inflation (CSI) and bandpass filtered activity measures is high and has not declined over the last decades, contrary to standard measures of the slope of the Phillips curve. … we construct a new price index designed to maximize the cyclical variation in the price index. This index, which we call Cyclically Sensitive Inflation (CSI), estimates the weights on the component prices...

Public Versus Private Digital Money: Macroeconomic (ir)relevance. Dirk Niepelt is Director of the Study Center Gerzensee and Professor at the University of Bern. A research fellow at the Center 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 a visiting professor at the Institute for International...

Public Versus Private Digital Money: Macroeconomic (ir)relevance. Dirk Niepelt is Director of the Study Center Gerzensee and Professor at the University of Bern. A research fellow at the Center 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 a visiting professor at the Institute for International...

NZZ, 10 July 2019, with Corinne Zellweger-Gutknecht. PDF. Libra is supposed to be backed; the returns on the securities backing it are going to be distributed among the Libra partners; and Libra’s price is supposed to be managed by a network of market makers. We don’t know much more. Will market makers have the incentive to deliver? See also the longer article in Jusletter.

Accepted for publication in the Journal of Monetary Economics, with Markus Brunnermeier. (NBER wp.) When does a swap between private and public money leave the equilibrium allocation and price system unchanged? To answer this question, the paper sets up a generic model of money and liquidity which identifies sources of seignorage rents and liquidity bubbles. We derive sufficient conditions for equivalence and apply them in the context of the “Chicago Plan”, cryptocurrencies, the Indian...

In an interview with the NZZ, Gabriel Felbermayr explains where the European Union adds value, and where it doesn’t. The key points: Free trade for goods and services as well as capital and labor mobility are partial substitutes. Partial, because factor mobility fosters trade and technology transfer. Estimates suggest that free trade and capital mobility generate more than 80% of the welfare gains from European integration. Even labor mobility does not require admission into welfare...

In the FT, Jean-Pierre Landau argues that central banks should introduce central bank digital currency: A CBDC would protect the pre-eminence of public money in a digitalised economy. It would maintain effective convertibility of private into public money and provide a defence against digital dollarisation. For that purpose, a CBDC should be as close as possible to cash. It should be a complement, not a substitute, to bank deposits. It should not carry interest. Whether it should be...

Jusletter, 1 July 2019, with Corinne Zellweger-Gutknecht. PDF. Libra is supposed to be backed; the returns on the securities backing it are going to be distributed among the Libra partners; and Libra’s price is supposed to be managed by a network of market makers. We don’t know much more. Will market makers have the incentive to deliver?

Finanz und Wirtschaft, June 29, 2019. PDF. It is not central bank digital currency (CBDC) per se which might act as a game changer in financial markets. What will be key is how central banks accommodate the introduction of CBDC. In principle, this accommodation can go very far, to the point where the introduction of CBDC does not affect macroeconomic outcomes. But such complete accommodation is unlikely. On the one hand, central banks will want to exploit the new monetary policy options...