Nils Jannsen

Costs of Housing Crises: International Evidence

This paper analyzes the costs of housing crises in terms of GDP growth and the economic conditions under which crises are particularly costly. Housing crises are often followed by recessions that are longer than other recessions. According to empirical estimates, a housing crisis reduces the GDP growth rate in the following year on average by two percentage points and has still a considerable negative impact in the second year. One important channel through which the effect of housing crises is passed on seems to be the banking sector. In addition, our results suggest that negative wealth effects possibly cause further reductions in GDP.

A NOTE ON BANKING AND HOUSING CRISES AND THE STRENGTH OF RECOVERIES

We investigate whether recoveries following normal recessions differ from recoveries following recessions that are associated with either banking crises or housing crises. Using a parametric panel framework that allows for a bounce-back in the level of output during the recovery, we find that normal recessions are followed by strong recoveries in advanced economies. This bounce-back is absent following recessions associated with banking crises and housing crises. Consequently, the permanent output losses of recessions associated with banking crises and housing crises are considerably larger than those of normal recessions.

Die Bedeutung monetärer Größen für die deutsche Wachstumsschwäche 1995-2005

Summary Between 1995 and 2005, the German economy has experienced a phase of weak economic growth. We analyze whether this weak growth performance can be attributed to the stance of monetary conditions during that period. We show that the real effective exchange rate did have almost no dampening effects on growth. On the contrary, the introduction of the euro and the single monetary policy for the euro area seem to have contributed significantly to the low trend growth rate in Germany between 1999 and 2005.

Post-crisis business investment in the euro area and the role of monetary policy

ABSTRACT Business investment in the euro area strongly declined during the Global Financial Crisis and the Sovereign Debt Crisis. It has not yet rebounded to its pre-crisis trend despite the very expansionary monetary policy measures of the ECB. We analyse the sluggish recovery in business investment in the euro area and the role of monetary policy in three steps. We investigate the main factors that have impeded business investment since the Global Financial Crisis. We empirically analyse how business investment has developed compared to typical patterns during other financial crises. Based on these results, we then discuss how effective monetary policy has been in stimulating business investment since the Global Financial Crisis. We conclude that business investment in the euro area has developed broadly in line with typical post-crisis patterns. Monetary policy significantly contributed to stabilize business investment at the beginning of the crises. In the aftermath of the crises, however, there seems to be little scope for monetary policy to further stimulate investment.

Absatzrisiken deutscher Ausfuhren

Der regionale Risikogehalt bemisst sich jedoch nicht nur an der regionalen Diversifi kation, sondern auch an der Schwankungsanfälligkeit der Konjunktur in den Abnehmerländern. Nehmen die Exportanteile solcher Volkswirtschaften zu, die eine sehr hohe Volatilität des Bruttoinlandsprodukts aufweisen, so neigen auch die deutschen Ausfuhren ceteris paribus stärker zu ausgeprägten Schwankungen. Ferner erhöht sich der Risikogehalt der deutschen Ausfuhren, wenn der konjunkturelle Gleichlauf in den Abnehmerländern sehr hoch ist, sodass ein konjunktureller Einbruch in einer Volkswirtschaft mit größerer Wahrscheinlichkeit auch mit einer Eintrübung der AbsatzKonjunkturschlaglicht

Is Globalization Reducing the Ability of Central Banks to Control Inflation? A Literature Review with an Application to the Euro Area

Abstract Globalization influences inflation and the transmission channels of monetary policy in various ways. The effects of globalization on the ability of monetary policy to control inflation have been discussed intensively. However, in the light of recent experiences following the global financial crisis with extended periods of disinflation in many advanced economies, the question whether the ability of monetary policy to control inflation has suffered significantly from increasing globalization has received new relevance. Based on a review of the literature, this paper discusses whether globalization is reducing the ability of central banks to control inflation and draws conclusion for the current situation in the euro area. We find that globalization has made it more complicated for central banks to ensure price stability and that it has tended to reduce the ability of monetary policy to control inflation in the short- to medium-run. However, in principle the ECB is still able to control inflation but may have to tolerate deviations from its inflation target for somewhat longer periods.