Dirk Niepelt

The Economist refers to our work in the `Free Exchange’ section: But some argue banks would work fine if the public switched their deposits for central-bank digital currencies, so long as the central bank stepped in to replace the lost funding. “The issuance of [such currencies] would simply render the central bank’s implicit lender-of-last-resort guarantee explicit,” wrote Markus Brunnermeier and Dirk Niepelt in 2019. This scenario seems to have partly materialised since the failure...

Recall this post from six years ago. Òscar Jordà, Björn Richter, Moritz Schularick, and Alan M. Taylor suggest that higher bank capital ratios help stabilize the financial system ex post but not ex ante, and that illiquidity breeds fragility.

With its annual report from a few weeks ago the SNB communicated minor changes in its monetary policy strategy (p. 24): The review of the monetary policy strategy showed that it has fundamentally proved its worth. There was no need to adjust the first two elements, namely the definition of price stability and the conditional inflation forecast. The strategy has enabled the SNB to fulfil its mandate of price stability well, despite repeated strong external shocks in recent years. The...

Neue Zürcher Zeitung, March 22, 2023. PDF. How to respond? Nationalization now rather than later? Breaking UBS up? Placing government representatives on the supervisory board? Illiquidity crises and the lender of last resort. Vollgeld, higher reserve requirements, and CBDC as partial solutions to TBTF problems.

Swiss Banking proposes a “Deposit Token,” New Money for Switzerland. This white paper focuses on the question of how banks can best support the Swiss economy when it comes to settling transactions in digital assets and executing payments in a digitalised economy. As the digital transformation sweeps through the economy and society at large, it requires support from efficient, generally accepted and secure means of payment. Against this background and considering developments such as the...

An American professor’s perspective as reported on Irwin Collier’s Economics in the Rear-View Mirror: On an October morning, some years since, a recent Vermont graduate and I entered together the Aula of the Friedrich-Wilhelms-University at Berlin. Lectures were still two weeks away; but Germany is a country of leisurely beginnings and this was the morning of matriculation. The great hall was thronged with an interesting company. At a long table sat the Rector Magnificus, Harnack, the...

WKO guest professor at the University of Vienna. Public event on 19 January.

MA course at the University of Bern. Time: Monday, 12.15 – 14.00. Location: UniS, A027. Uni Bern’s official course page. TA: Remo Taudien. 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. The classes follow selected chapters in the textbook Macroeconomic...

BA course at the University of Bern. Time: Monday, 10:15–12:00. Location: UniS, S101. Uni Bern’s official course page. The course targets students who have completed their mandatory training in microeconomics, macroeconomics and mathematics and who are interested to make use of macroeconomic theory in order to analyze questions related to asset prices, bubbles, government debt, or the link between fiscal and monetary policy. The grade may depend on participation in class; small group...

In one of the eBooks that CEPR published in 2022 several authors draw first conclusions. From the introduction by Jonathan Portes: The analyses in this eBook are very much a preliminary and incomplete account of the economic impacts of Brexit. In some cases, they raise as many questions as they answer.For example, why have UK imports of EU goods fallen so sharply, while UK exports are much less affected, when (in contrast to the EU) the UK has not yet introduced the full panoply of...