RESEARCH AREAS

Financialization–History, Economics, Politics

The widely held belief that financial deepening benefits the economy by efficiently allocating capital and diversifying risk was shaken to its core by the breadth and scope of the 2008/09 financial crisis. This research project combines 140 years of economic history with state-of-the-art econometric methods to gain new insights into the relationship between finance, growth and crises.

Housing Markets in History

For economists there is no price like home—at least not since the global financial crisis. Fluctuations in house prices and their importance for the macroeconomy have become a rapidly expanding research field. The economic history of advanced economies is spattered with narratives about booms and busts in real estate prices. Yet we know surprisingly little about long-run trends and cycles in house prices. This research project aims to fill this void.

Long-term Economic Persistence

Simply put, economic persistence examines the historical factors that affect economic performance today. As such, it combines insights from economic development, history and growth. Ultimately, it is a quest for the deep-rooted geographic, institutional, educational, genetic and cultural determinants of comparative economic development. This research project will emphasize the long-lasting legacy of colonialism with a special focus on Latin America.

Size of Finance

In the years prior to the recent financial crisis, wages and value added of the financial sector skyrocketed relative to the rest of the economy. This research project aims to provide new insights into the growth and change of the financial sector and to advance our understanding of common trends and differences across countries in its historical evolution. As a central part of the project, we construct a dataset to measure the contribution of the financial sector to GDP in advanced economies since 1870.

NEW RESEARCH

Central banks increasingly rely on macroprudential measures to manage the financial cycle. However, the effects of such policies on the core objectives of monetary policy to stabilise output and inflation are largely unknown. In this paper we quantify the effects of changes in maximum loan-to-value (LTV) ratios on output and inflation. We rely on a […]

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This paper presents annual stock market capitalization data for 17 advanced economies from 1870 to today. Extending our knowledge beyond individual benchmark years in the seminal work of Rajan and Zingales (2003) reveals a striking new time series pattern: over the long run, the evolution of stock market size resembles a hockey stick. The stock […]

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This paper introduces a new long-run dataset based on archival data from historical waves of the Survey of Consumer Finances. The household-level data allow us to study the joint distributions of household income and wealth since 1949. We expose the central importance of portfolio composition and asset prices for wealth dynamics in postwar America. Asset […]

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The Rate of Return on Everything, 1870–2015

with Óscar Jordá, Katharina Knoll, Dmitry Kuvshinov and Alan M. 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? Is there […]

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with Benjamin Born, Gernot Müller, Moritz Schularick and Petr Sedlacek. This paper introduces a data-driven, transparent and unbiased method to calculate the economic costs of the Brexit vote in June 2016. We let a matching algorithm determine a combination of comparison economies that best resembles the growth path of the UK economy before the Brexit […]

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with Moritz Kuhn and Ulrike Steins. This paper studies the distribution of U.S. household income and wealth over the past seven decades. We introduce a newly compiled household-level dataset based on archival data from historical waves of the Survey of Consumer Finances (SCF). Complementing recent work on top income and wealth shares, the long-run survey […]

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