Publications
Help Wanted: the Drivers and Implications of Labour Shortages
joint work with: David Sondermann (ECB)
Applied Economics (2025), ECB Working Paper No. 2863
Labour shortages have become prevalent across advanced economies. Yet, little is known about which firms are more likely to face them and the impact they have on the labour market. We create a firm-level dataset spanning 28 EU countries, 283 regions and 18 sectors, contributing to close this gap. We find that structural factors play the dominant role. Firms in regions with limited labour supply as well as innovative and fast-growing firms are particularly prone to face labour shortages. Moreover, shortages tend to aggravate at business cycle peaks. Linking labour shortages to labour market tightness and matching efficiency, in the spirit of search and matching models, we empirically determine their impact on wages and hiring. Firms with higher shortages pay a wage growth premium to keep and attract workers, increasingly so if they face excess demand. At the same time, those are the firms that hire less than the average.
Environmental Regulation and Productivity Growth in the Euro Area: Testing the Porter Hypothesis
joint work with: Nicola Benatti (ECB), Petra Kelly (Imperial College London), Paloma Lopez-Garcia (ECB)
Journal of Environmental Economics and Management (2024), ECB Working Paper No. 2820
This paper examines the impact of changes in the stringency of environmental regulations on productivity growth. We exploit several data sources, including the OECD Environmental Policy Stringency Index and balance sheet information from ORBIS and iBACH, to test the Porter hypothesis, according to which firms’ productivity can benefit from more stringent environmental policies. We estimate the regulatory impact over a five-year horizon using panel local projections. To identify the direction of the effects, we estimate equivalent emissions for all firms in our sample using a machine learning algorithm. As suggested by the country-level analysis and confirmed by the firm-level analysis, policy tightening negatively affects productivity growth of high-polluting firms and to a larger extent than that of their low-polluting peers. Hence, we do not find support for the Porter hypothesis in general. However, not all policies have the same impact - non-market based policies are the most detrimental to productivity growth - and not all highly polluting firms are affected in the same way - the negative impact is mitigated for large firms, which may benefit from easier access to finance and greater innovativeness.
Working Papers
Monetary Policy, Property Prices and Rents: Evidence from Local Housing Markets
joint work with: Nicolas Syrichas (Freie Universität Berlin)
Media coverage: Institutional money
Monetary policy is known to affect house prices, but its effects on rents remain unclear. Lower interest rates make transitions into homeownerhsip more attractive, but may raise rental demand among non-buying households. We directly compare responses of property prices and new-lease rents using a unique dataset of 40 million sale and rental listings from Germany between 2007 and 2023, combined with high-frequency monetary policy surprises. A one-standard-deviation cut in the Shadow Rate raises property prices by about 3% and rents by about 0.5% after three years. Rents increase particularly in regions with higher transaction costs and smaller rental sectors, consistent with limited substitution into homeownership. Household survey data show that renter-to-owner transitions increase but remain modest relative to the renter stock, while rent payments rise among households that continue renting. These findings imply that monetary easing benefits incumbent homeowners while housing costs increase for moving and marginal renters.
Equalising Monetary Policy - the Earnings Heterogeneity Channel in Action
This paper studies the effects of conventional and unconventional monetary policy measures on the wage distribution. Using administrative labour market data from Germany, I construct quarterly inequality measures that allow me to analyse the effects of policy rate and quantitative easing (QE) shocks on wage inequality over the period 1999 to 2019. The results show that wages increase across the whole wage distribution three to six quarters after expansionary policy rate or balance sheet shocks. QE affects wages at the bottom of the distribution more than at the top, leading to significant and persistent equalising effects. Policy rate cuts also tend to decrease wage inequality, but their effect is less pronounced. These equalising dynamics stem from the fact that after an expansionary policy shock low-income worker, especially young men, benefit more in terms of wages from finding or switching a job than high-income workers.
The Impact of Environmental Regulation on Clean Innovation: Are There Crowding Out Effects?
joint work with: Nicola Benatti (ECB), Petra Kelly (Imperial College London), Paloma Lopez-Garcia (ECB)
ECB Working Paper No. 2946
We examine how environmental regulation influences innovation, and which policy instruments most effectively stimulate technological development across 15 countries and 3 million firms. Employing panel local projections, we go beyond immediate impact and estimate effects of regulatory changes on patenting over a five-year horizon. To address gaps in emissions reporting, we estimate firm-level greenhouse gas emissions by a machine learning approach, which serve as a proxy for regulatory exposure. At the country level, stricter emission regulation shows little impact on overall environmental technology innovation. At the firm level, however, tighter policies spur innovation in climate change–mitigating technologies, without evidence of crowding out other forms of innovation. These effects are strongest for clean energy technologies, particularly among high polluters in energy-intensive sectors. Policy design plays a critical role: increases in the stringency of technology support and non-market-based instruments significantly boost clean technology patenting, whereas we find no robust effect of market-based instruments. This also holds specifically for clean energy technology patenting.
Work in progress
The Asymmetric Effects of Monetary Policy on Wage Inequality
This paper studies the asymmetric effects of monetary policy on wages and wage inequality. I construct new high-frequency monetary policy surprises for the German Bundesbank (1984–1999) and the ECB (1999–2023) and relate them to monthly wage inequality measures derived from social security data in a local projection framework. Wage inequality declines significantly following expansionary monetary policy shocks, while remaining stable following contractionary shocks. Hence, symmetry of monetary policy is rejected. While expansionary shocks have a weak and slow effect on unemployment, they increase wages more at the bottom of the distribution than at the top, reducing inequality. In contrast, contractionary monetary policy significantly increases unemployment due to downward wage rigidity, particularly among low-wage workers, leading to compositional changes with small distributional effects.
Monetary Policy and the Rigidity of Firm Employment Expectations
joint work with: David Sondermann (ECB)
This paper examines how monetary policy announcements affect firms' employment expectations. Using German survey data, we combine high-frequency monetary policy surprises with survey response dates to identify the immediate and dynamic effects of monetary policy on firm-level expectations and subsequent employment. Contractionary shocks lead firms to revise employment plans downward immediately and persistently, eventually reducing employment growth. Initially, hiring plans are reduced, while layoffs increase later. Production expectations adjust twice as often but revert faster, consistent with greater labour market rigidity. Labour market institutions shape these responses: firms subject to the minimum wage or with lower collective bargaining coverage revise employment expectations more strongly. Financially constrained firms exhibit disproportionately larger downward revisions, indicating that the financial accelerator operates already at the expectation formation stage. Because firms adjust plans well before effects appear in aggregate data, employment expectations provide an early measure of monetary policy transmission to the labour market.