Several formal methods have been proposed to check identification in DSGE models via (i) the autocovariogram (Iskrev 2010), (ii) the spectral density (Komunjer and Ng 2011; Qu and Tkachenko 2012), or (iii) Bayesian indicators (Koop et al 2012). Even though all methods seem similar, there has been no...

This paper provides an alternative theory of price adjustment resting on consumer loss aversion in the price dimension. In line with prospect theory the perceived losses from price increases are weighted stronger in the consumer s utility function than the perceived gains resulting from price...

The personalities of central bankers moved center stage during the recent financial crisis. Some central bankers even gained "superstar" status. In this paper, we evaluate the pivotal role of superstar central bankers by assessing the difference an outstanding governor makes to economic...

We show that TFP reacts counter-cyclically to macroeconomic shocks, which we identify by imposing sign restrictions. Counterfactual simulations, based on a New Keynesian DSGE model, show that firms manage to employ labor more efficiently during downturns, which leads to a muted drop in the...

We investigate the updating behavior of individual consumers regarding their short- and long-run inflation expectations. Utilizing the University of Michigan Survey of Consumer's rotating panel microstructure, we can identify whether individuals adjust their inflation expectations over a period...

This paper discusses the reasons for the dismal labor market performance of Germany over the last three decades along with potential remedies. It argues that labor market rigidities along with a generous welfare state in conjunction with certain changes in the economic environment are important...

We integrate systemic financial instability in an empirical macroeconomic model for the euro area. We find that at times of widespread financial instability the macroeconomy functions fundamentally differently from tranquil times. We employ a richly specified Markov-Switching...