We implement a quantitative empirical test of the fiscal theory of the price level (FTPL) model via indirect inference, comparing it to a standard New Keynesian model. The FTPL alternative creates a serious instability problem because it triggers a 'doom loop'in which inflation pushes up...

President Joe Biden faces some political and economic headwinds in the upcoming U.S. midterm elections this year. Current economic challenges include historically high inflation rates and signs of an impending recession. [...] This paper gives a critical overview of the political and economic...

The US Inflation Reduction Act (IRA) promotes renewable energy and contributes to climate protection, but also offers generous tax credits and subsidies to incentivize production in the United States. While the planned generosity of the program has sparked an intense debate about potential...

This paper builds on Baqaee and Farhi (2022) and di Giovanni et al. (2022) to quantify the contribution of fiscal policy to U.S. inflation over the December 2019-June 2022 period. Model calibrations show that aggregate demand shocks explain roughly two-thirds of total model-based inflation, and...

Die Auswirkungen des IRA auf die heimische Wirtschaft der Vereinigten Staaten sind umstritten. Empirische Studien zu den Auswirkungen des IRA auf Handelspartner, insbesondere Deutschland, liegen nicht vor. Deskriptive Statistiken zeigen, dass die Vereinigten Staaten insbesondere im Bereich der...

Zum Ende des Jahres 2023 verliert die Weltwirtschaft weiter an Schwung. Die Phase der Erholung von der Pandemie ist weitgehend abgeschlossen, und der durch den weltweiten Inflationsschub ausgelöste restriktive Schwenk der Geldpolitik drückt über höhere Finanzierungskosten vielerorts die...

Monetary developments of recent decades began with much promise with inflation targeting by independent central banks; the financial crisis of 2007 ushered in a period of great monetary instability. There are lessons for a return to more stability. Central banks need to stabilize money supply...