How do inflation expectations respond to a change in the preferences of the central bank? In a new paper, Moritz Grebe and I use a natural experiment: the surprise resignation of Jens Weidmann, the President of the Bundesbank, in 2021. papers.ssrn.com/sol3/papers....

Great to see our short note in print

Wow: "an unprecedented second vote by the Monetary Policy Committee after it initially failed to reach a majority verdict" #BankofEngland www.ft.com/content/236c...

Sometime I envy the natural scientists. No economist needed for a research cruise to the arctic.

Faszinierend: Daten von 630000 Gemälden seit 1400. Mehr dazu in NBER WP 33976.

Er liefert dem MAGA Lager die Munition. Unverantwortlich. www.spiegel.de/wirtschaft/m...

A normal day in the Oval Office (polymarket.com/event/will-t...)

Literally the Russian flag in the post. Two of them

Zum 150sten.

New paper: do members of the Bundestag change their fiscal stance after an ECB decisions? I use NLP tools in an event study: a tightening causes a less expansionary stance in the two weeks after the ECB decision. The effect disappears at the ZLB. papers.ssrn.com/sol3/papers....

Stanley Fischer was incredibly influential www.ft.com/content/0990...

This is how you destroy a safe haven: "Section 899 of the bill ... would allow the US to impose additional taxes on companies and investors from countries that it deems to have punitive tax policies." www.ft.com/content/b400...

Absolutely ridiculous and irresponsible from El Erian. If you want to protect the integrity and independence of the Fed, you do not create gratuitous paths to power grabs that directly undermine independence

-25bp #ECB

Sentiment falling off a cliff:

🦑💫This NASA/ESA Hubble image features the spiral galaxy Messier 77, also known as the Squid Galaxy. It would take more than a century between the discovery of the galaxy and the realisation that the ‘spiral nebulae’ scattered across the sky were not part of our own galaxy! #HubbleSpaceTelescope 🔭

Kultur und russische Propaganda: www.zeit.de/kultur/2025-...

Here's how that compares to this point in Biden's term and Trump's first term:

Going off-piste

All major currencies appreciating against USD today 1.5-2.5%

Our cover this week.

This is what Trump's "economists" say about how they calculated the "reciprocal" tariffs. Don[t be fooled by the equation. They commit countless crimes against economics. ustr.gov/issue-areas/... +

The US announces big tariffs and the Dollar falls on the day. That could mean: (i) markets don't believe any of this after all the back and forth on tariffs; (ii) markets think this hurts the US more than the rest of the world. I think it's (i), which means USD rises a lot if these tariffs stick.

@timharford.ft.com on GDP www.ft.com/content/8d53...

Gebt 🇺🇸 Spitzenforschern eine neue Heimat! Ein Gastbeitrag im SPIEGEL, von Nicola Fuchs-Schündeln, Ulrike Malmendier, Moritz Schularick, Achim Truger, Georg Weizsäcker, Martin Werding, Cornelia Woll und mir. www.spiegel.de/ausland/usa-...

"Many clients were looking to diversify away from the US dollar" www.ft.com/content/f8c7...

Check out the @alphaville.ft.com central banking merch: www.redbubble.com/de/people/ft...

It is very rare to see dissent from a governor. This shows the number of dissenting presidents and governors on the FOMC since 2009. Data: www.stlouisfed.org/on-the-econo...

Sehr interessant:

A group of European countries is devising a strategy to poach researchers in the United States in response to American government cuts in education and research. www.politico.eu/article/euro...

The Fed talks about first and second derivatives: "the Committee will slow the pace of decline of its securities holdings". Not easy to understand. #FOMC

The thing about Biden/Harris losing is now autocrats are going to be a lot more bold in their anti-democratic actions knowing the US will not punish them.

@bundesbank.de Gibt es eine Möglichkeit, die Artikel aus dem Monatsbericht als .pdf zu sehen, ohne die Formatierung zu zerstören?

Interesting column featuring our recent paper on "The Emotions of Monetary Policy"

Thanks @t0nyyates.bsky.social for citing our paper on "The Emotions of Monetary Policy" in the Financial Times

I published a short note on the implications of a proposed constitutional amendment in Germany, which includes an 11% of GDP fund for infrastructure and permission to fund most military spending outside the debt brake’s maximum deficit of 0.35% of GDP (Thread, 1/9): www.bruegel.org/analysis/can...

Unser Beitrag in der @faznet.bsky.social : In den 🇺🇸 werden Wissenschaftlern die Mittel gekürzt. Das ist der richtige Moment, um US-Spitzenforscher nach 🇩🇪 zu holen! @arieldora.bsky.social & @martin-watzinger.com & ich in FAZ Wirtschaft/Der Volkswirt: „Deutschlands Chance“

PhD, Finanzindustrie, Gouverneur von zwei Zentralbanken, jeweils in schweren Krisen, danach Premierminister: Mark Carney erinnert an Mario Draghi. www.faz.net/aktuell/poli...

Wumms ohne Wachstumswende www.faz.net/aktuell/wirt...

Die 10jährigen deutschen Zinsen haben heute um etwa 20bp auf die gestrigen News reagiert. Zum Vergleich hier die Reaktionen der 10y Zinsen auf die News an EZB-Sitzungstagen seit 1999 (Daten von Altavilla et al, 2019), ebenfalls in bp

"The most striking aspect to these steps, which amount to a charter for criminals, is that Trump is making little attempt to dress them up. This pig has no lipstick." www.ft.com/content/afe7...

I don't think there's precedent for this level of open corruption at the federal level, certainly not in the last 100+ years.

Maurice Obstfeld: Tariffs are not going to solve America’s ills www.ft.com/content/ae84...

Call for papers for a special issue on "Fiscal Rules and Institutions". Our guest editors are Thiess Büttner (FAU Erlangen Nürnberg) and Friedrich Heinemann (ZEW and University of Heidelberg); deadline for full paper: 31.10.2025. www.uni-giessen.de/de/fbz/fb02/...

Dear Volodymyr Zelenskyy, dear Ukrainian friends, you are not alone.

What is the economic effect of spending on the Bundeswehr? In a new note, we analyze the debates in the Bundestag since 1970. An increase in Bundeswehr-related fiscal sentiment causes an expansion of real economic activity. drive.google.com/file/d/1H83v...

@chrisgiles.ft.com: "If Trump wanted to take control, its constitutional protections are far from secure" www.ft.com/content/28d0...

"Deutschlands Sicherheit rechtfertigt höhere Staatsschulden" www.faz.net/aktuell/wirt...

Today marks the third anniversary of Russia’s unjustified invasion of Ukraine. We continue to stand with the people of Ukraine, who have been suffering through this horrific aggression.