Recent proposals for a European deposit insurance scheme (EDIS) favor a reinsurance framework. In this paper, we use a regime-switching open economy DSGE model with bank defaults to assess the relative efficiency of such a scheme. We find that reinsurance by EDIS is more effective in stabilizing real activity, credit, and welfare than a national fiscal backstop. We demonstrate that risk-weighted contributions ...
Expectations are high that transition plans will drive the decarbonization of the economy. However, companies often lack clarity on how their transition plans are utilized. Strengthening the alignment between transition plans of financial institutions and businesses is crucial to ensure consistent climate action across sectors. Additionally, there is a gap between the ESG and/or transition metrics...
The 4th annual Workshop for Women in Macroeconomics, Finance and Economic History is being organized by the DIW Berlin. The aim is to bring together female academic researchers and practitioners to promote and exchange ideas in the field of Macroeconomics, Finance, and Economic History. We invite contributions, including, but not limited to macroeconomic and financial stability, interactions...
Using a data-driven approach to identify structural vector autoregressive models, we examine key factors influencing the US dollar exchange rate across eight advanced economies from 1980 to 2022. We find that shocks to inflation expectations, which are closely tied to unfunded government transfer payments, have a pronounced effect on the US dollar’s value. This underscores the fiscal dimension of exchange ...
We study sovereign external debt crises over the past 200 years, with a focus on creditor losses, or “haircuts”. Our sample covers 327 sovereign debt restructurings with external private creditors over 205 default spells since 1815. Creditor losses vary widely (from none to 100%), but the statistical distribution has remained remarkably stable over two centuries, with an average haircut of around 45 ...
Stock market participation among working household heads jumped upwards in 2020-in Germany by about 25%. A major cause is the required use of work from home (WfH). We show this by repeating a benchmark study and adding WfH to the explanatory variables. Moreover, we implement an instrumental variables estimation based on industry-specific levels of WfH-capacity. The transmission channels seem to work ...
The decommissioning of nuclear power plants is a complex and lengthy process. But so far, of the 204 already closed reactors, only eleven with more than 100 MW of electrical capacity have been fully decommissioned, while another 200 reactors are expected to reach the end of their operational lifetime in the next two decades. Against this backdrop, this comparative cross-country case study investigates ...