CEPR Discussion Paper 12218
Revision requested, Journal of Political Economy
with Moritz Kuhn and Ulrike Steins

This paper studies the distribution of U.S. household income and wealth over the past seven
decades. While incomes stagnated, the middle class enjoyed substantial gains in housing wealth from highly concentrated and leveraged portfolios. The housing bust of 2007 triggered the largest spike in wealth inequality in postwar history.

NBER Working Paper 23287
Revision requested, Review of Economic Studies
with Òscar Jordà, Björn Richter and Alan Taylor

This paper undertakes the first comprehensive analysis of the long-run evolution of the capital structure of modern banking. We find little evidence that higher capital ratios restrain excessive risk-taking and affect the probability of systemic banking crises ex ante.
Media: FAZ

No Price Like Home
American Economic Review (2017)
with Katharina Knoll and Thomas Steger

We are able to show that house prices in most industrial economies stayed constant in real terms from the 19th to the mid-20th century, but rose sharply in recent decades. Land prices, not construction costs, hold the key to understanding the trajectory of house prices in the long-run.
Summary on VoxEU
Media coverage: Financial Times; FAZ

American Economic Review (2012)
with Alan Taylor

We study the behavior of money, credit, and macroeconomic indicators over the long run. Total credit has increased strongly relative to output and money in the second half of the twentieth century. Credit growth is a powerful predictor of financial crises.
Summary on VoxEU

Economic Journal (2019)
with Benjamin Born, Gernot Müller, Petr Sedlacek

Economic nationalism is on the rise. What are the costs of cutting back international economic integration and rising policy uncertainty? We use the unexpected outcome of the Brexit vote in June 2016 as a natural macroeconomic experiment to study the costs of economic disintegration and their causes.
Summary on VoxEU

CEPR Working Paper 12188,
Revision requested, Journal of Money, Credit, and Banking
with Bjoern Richter and Paul Wachtel

This paper shows that policy-makers can distinguish between good and bad credit booms with high accuracy and they can do so in real time. 

NBER Working Paper 25653
with Òscar Jordà and Alan Taylor

The risk premium puzzle is worse than you think. Using a new database for the U.S. and 15 other advanced economies from 1870 to the present that includes housing as well as equity returns (to capture the full risky capital portfolio of the representative agent), standard calculations using returns to total wealth and consumption show that: housing returns in the long run are comparable to those of equities, and yet housing returns have lower volatility and lower covariance with consumption growth than equities.

Stable Genius? The Macroeconomic Impact of Trump
CEPR Discussion Paper 13798
with Benjamin Born, Gernot Müller, Petr Sedlacek

How much credit does Donald Trump deserve for the macroeconomic performance of the US
economy? We let a matching algorithm determine which combination of other economies best resembles the pre-election path of the US economy. We then compare the post-election performance of the US economy to this synthetic "doppelganger". For now there is little evidence for a Trump effect.

Quarterly Journal of Economics (2019)
with Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Alan Taylor

This paper answers fundamental questions that have preoccupied modern economic thought since the 18th century. What is the aggregate real rate of return in the economy? Is it higher than the growth rate of the economy and, if so, by how much?

The Effects of Quasi-Random Monetary Experiments
Journal of Monetary Economics (2019)
with Òscar Jordà and Alan Taylor

The annals of international finance thus provide quasi-natural experiments with which to measure how macroeconomic outcomes respond to policy rates. We find that the effects of monetary policy are much larger than previously estimated, and that these effects are state-dependent.

Journal of International Economics (2018)
with Bjoern Richter and Ilhyock Shim

In this paper, we quantify the effects of changes in maximum loan-to-value (LTV) ratios on output and inflation. We rely on a narrative identification approach based on detailed reading of policy-makers’ objectives when implementing the measures.

IMF Economic Review (2019)
with Òscar Jordà, Alan Taylor and Felix Ward

We show that U.S. monetary policy has come to play an important role as a source of fluctuations in risk appetite across global equity markets. These fluctuations are transmitted across both fixed and floating exchange rate regimes, but the effects are muted in floating rate regimes

CESIfo Working Paper 4445
Revision requested, International Economic Review
with Vasiliki Skreta and Karthik Reddy

Legal provisions that protect politicians from arrest and prosecution exist throughout much of the modern democratic world. Why, and with what effects, do societies choose to place their politicians above the law?