Macroeconomics Department Publications

Rent Control Effects through the Lens of Empirical Research: An Almost Complete Review of the Literature

Rent control is a highly debated social policy that has been omnipresent since World War I. Since the 2010s, it is experiencing a true renaissance, for many cities and countries facing chronic housing shortages are desperately looking for solutions, directing their attention to controling housing rents and other restrictive policies. Is rent control useful or does it create more damage than utility? ...

Certification against Greenwashing in Nascent Bond Markets: Lessons from African ESG Bonds

Africa is one of the most vulnerable continents to climate change. Climate and sustainability-linked bonds can provide funding to African governments and corporations for projects that help to mitigate climate change, combat biodiversity loss, and foster sustainable development. However, less than 0.3% of the global environmental, social, governance (ESG) bond issuance volume is devoted to projects ...

Rising Allowances, Rising Rates — Can Growth Arise through Business Income Tax Reform despite Government Debt Limit?

The system of business income taxation consists of two instruments, namely a statutory tax rate and a depreciation allowance on investment. We will show in this paper that by acting on both instruments simultaneously it is possible to achieve both a growth and a fiscal net revenue target even in cases when a trade-off prevails when each instrument is used individually.As will be shown in the paper, ...

Is Interest Rate Hiking a Recipe for Missing Several Goals of Monetary Policy—Beating Inflation, Preserving Financial Stability, and Keeping up Output Growth?

levelsof all goods in the US and Europe rose surprisingly quickly and persistently. TheFED began in March 2022 and the ECB in July 2022 with historically unique interestrate increases to combat the wage-price spiral that had not yet begun. In this article weshow that energy, commodities and food were the main drivers of inflation. For this reason,central banks’ goal of weakening demand for labor through ...

A HANK2 Model of Monetary Unions

How does a monetary union alter the impact of business cycle shocks at the household level? We develop a Heterogeneous Agent New Keynesian model of two countries (HANK) and show in closed form that a monetary union shifts the adjustment to a shock horizontally across countries, within the brackets of the union-wide wealth distribution, rather than vertically, that is, across the brackets of the union-wide ...

The Long Way to Tax Transparency: Lessons from the Early Publishers of Country-by-Country Reports

In this paper, we analyse a sample of voluntarily published country-by-country reports (CbCRs) of 35 multinational enterprises (MNEs). We assess the value added and the limitations of qualitative and quantitative information provided in the reports based on a comparison to individual MNEs’ annual financial reports and aggregate CbCR data provided by the OECD. In terms of data quality, we find that ...

Global Risk and the Dollar

The dollar is a safe-haven currency and appreciates when global risk goes up. We investigate the dollar’s role for the transmission of global risk to the world economy within a Bayesian proxy structural vector autoregressive model. We identify global risk shocks using high-frequency asset-price surprises around narratively selected events. Global risk shocks appreciate the dollar, induce tighter global ...

The Effectiveness of FX Interventions: A Meta-Analysis

There is ample empirical literature centering on the effectiveness of foreign exchange intervention (FXI). Given the mix of objectives and country-heterogeneity, the general lack of consensus thus far is no surprise. We shed light on this debate by conducting the first comprehensive meta-analysis in the FXI literature, with 279 reported effects that stem from 74 distinct empirical studies. We cover ...

Putting MARS into Space: Non Linearities and Spatial Effects in Hedonic Models

Multivariate Adaptive Regression Spline (MARS) is a simple and powerful non-parametric machine learning algorithm that automatizes the selection of non-linear terms in regression models. In this study, we propose using MARS in a spatial regression framework to account for potential non-linearities and spatial effects in spatial regression models. Using a relatively large data set of 17,000 dwellings ...

Do Rent Controls and Other Tenancy Regulations Affect New Construction? Some Answers from Long-Run Historical Evidence