Recent changes in the macroeconomic environment have raised and likely will con- tinue to raise the spectre of local shortages of production inputs. Limits to the supply of such goods mean that the local price of the goods may be rather elastic to domestic economic activity. In a simple open-economy New Keynesian setting, the paper explores conditions under which such shortages can raise the risk of self- fulfilling fluctuations. The paper highlights the role of ownership of the constrained factor, marginal propensities to consume, the factor’s use in consumption and pro- duction, and fiscal policy. A firmer focus of the central bank on input prices (or on headline consumer prices) removes such risks.

@Report{Gornemann2022_WP,
   author       = {Gornemann, Nils and Hildebrand, Sebastian and Kuester, Keith},
   date         = {2022-12},
   title        = {Limited energy supply, sunspots, and monetary policy},
   type         = {ECONtribute Discussion Paper},
   number       = {215},
   abstract     = {A common assumption in macroeconomics is that energy prices are determined in a world-wide, rather frictionless market. This no longer seems an adequate description for the situation that much of Europe currently faces. Rather, one reading is that shortages exist in the quantity of energy available. Such limits to the supply of energy mean that the local price of energy is affected by domestic economic activity. In a simple open-economy New Keynesian setting, the paper shows conditions under which energy shortages can raise the risk of self-fulfilling fluctuations. A firmer focus of the central bank on input prices (or on headline consumer prices) removes such risks.},
   keywords     = {energy crisis, macroeconomic instability, sunspots, monetary policy, heterogeneous households},
}
               

In a highly interlinked global economy a key question is how foreign shocks transmit to the domestic economy, how domestic shocks affect the rest of the world, and how policy actions mitigate or amplify spillovers. For policy analysis in such a context global multi-country macroeconomic models that allow a structural interpretation are needed. In this paper we present a revised version of ECB-Global, the European Central Bank’s global macroeconomic model. ECB-Global 2.0 is a semi-structural, global multi-country model with rich channels of international shock propagation through trade, oil prices and global financial markets for the euro area, the US, Japan, the UK, China, oil-exporting economies, Emerging Asia, and a rest-of-the-world block. Relative to the original version of model, ECB-Global 2.0 features dominant-currency pricing, tariffs and trade diversion. We illustrate the usefulness of ECB-Global exploring scenarios motivated by recent trade tensions between China and the US.

@Report{Georgiadis2021_WP,
  author       = {Georgiadis, Georgios and Hildebrand, Sebastian and Ricci, Martino and Schumann, Ben and van Roye, Björn},
  date         = {2021-03},
  title        = {ECB-Global 2.0: a global macroeconomic model with dominant-currency pricing, tariffs and trade diversion},
  type         = {ECB Working Paper},
  number       = {2530},
  abstract     = {In a highly interlinked global economy a key question is how foreign shocks transmit to the domestic economy, how domestic shocks affect the rest of the world, and how policy actions mitigate or amplify spillovers. For policy analysis in such a context global multi-country macroeconomic models that allow a structural interpretation are needed. In this paper we present a revised version of ECB-Global, the European Central Bank’s global macroeconomic model. ECB-Global 2.0 is a semi-structural, global multi-country model with rich channels of international shock propagation through trade, oil prices and global financial markets for the euro area, the US, Japan, the UK, China, oil-exporting economies, Emerging Asia, and a rest-of-the-world block. Relative to the original version of model, ECB-Global 2.0 features dominant-currency pricing, tariffs and trade diversion. We illustrate the usefulness of ECB-Global exploring scenarios motivated by recent trade tensions between China and the US.},
  keywords     = {macro-modelling, multi-country models, spillovers},
}
              

In this report, we summarize the contributions to the 53rd Konstanz Seminar on Monetary Theory and Policy 2022.

@Article{Hildebrand2022_CCM,
  author       = {Hildebrand, Sebastian and Stiepelmann, Gero},
  date         = {2022},
  journaltitle = {Credit and Capital Markets – Kredit und Kapital},
  title        = {53rd Konstanz Seminar on Monetary Theory and Policy 2022},
  doi          = {10.3790/ccm.55.3.419},
  number       = {3},
  pages        = {419--426},
  volume       = {55},
}
               

In this report, we summarize the contributions to the 54th Konstanz Seminar on Monetary Theory and Policy 2023.

@Article{Hildebrand2023_CCM,
  author       = {Hildebrand, Sebastian and Stiepelmann, Gero},
  date         = {2023-10},
  journaltitle = {Credit and Capital Markets -- Kredit und Kapital},
  title        = {54th Konstanz Seminar on Monetary Theory and Policy 2023},
  doi          = {10.3790/ccm.2023.01.hildebrand.stiepelmann},
  number       = {2},
  pages        = {1--9},
  volume       = {56},
}