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The Rate of Return on Everything
Quarterly Journal of Economics (2019)
with Òscar Jordà, Katharina Knoll, Dmitry Kuvshinov, Alan Taylor

Forthcoming, 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.

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

Forthcoming, Journal of Money, Credit, and Banking
with Bjorn 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. 

European Economic Review (2016),
with Manuel Funke and Christoph Trebesch

In this paper we study the political fall-out from systemic financial crises over the past 140 years. We construct a new long-run dataset covering 20 advanced economies and more than 800 general elections. Our key finding is that policy uncertainty rises strongly after financial crises as government
majorities shrink and polarization rises. After a crisis,voters seem to be particularly attracted to the political rhetoric of the extreme right, which often attributes blame to minorities or foreigners. On average, far-right parties increase their vote share by 30% after a financial crisis.

Media coverage: Die Zeit, Washington Post

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.

International Economic Review, forthcoming
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?

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with Alina Bartscher, Moritz Kuhn, Ulrike Steins, CEPR DP 14667

Debt-to-income ratios have risen most dramatically for households between the 50th and 90th percentiles of the income distribution. While their income growth was low, middle-class families borrowed against the sizable housing wealth gains from rising home prices. The resulting debt increase made balance sheets more sensitive to income and house price fluctuations and turned the American middle class into the epicenter of growing financial fragility.

Forthcoming, Review of Economic Studies
with Òscar Jordà, Bjorn Richter, 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

with Thilo Albers and Charlotte Bartels

This paper presents the first comprehensive study of the long-run evolution of wealth inequality in Germany. We combine tax data, surveys, national accounts and rich lists to study the distribution of wealth in Germany from 1895 to 2018. The concentration of wealth in the hands of the top 1% has fallen by half, from close to 50% in 1895 to less than 25% today. However, since unification the wealth gap between households in the bottom and the upper half has widened significantly.

CEPR Discussion Paper 13863, July 2019
with Franziska Hünnekes and Christoph Trebesch

Germany is world champion in exporting capital (“Exportweltmeister”). No other country invests larger amounts of savings outside its borders. However, Germany plays in the third division when it comes to investment performance.
Media: Die Zeit; FAZ

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? 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

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.

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.

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.