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Ralph Setzer

Economics

Division

Supply Side, Labour and Surveillance

Current Position

Lead Economist

Fields of interest

International Economics,Macroeconomics and Monetary Economics,Economic Growth

Email

Ralph.Setzer@ecb.int

Education
2001-2005

PhD in International Economics, University of Hohenheim (Germany)

1996-2001

Master in Economics, Universities of Tübingen (Germany), Valdivia (Chile) and Hohenheim (Germany)

Professional experience
2020

Lead Economist - Supply Side, Labour and Surveillance Division, Directorate General Economics, European Central Bank

2019

Principal Economist - Supply Side, Labour and Surveillance Division, Directorate General Economics, European Central Bank

2017-2019

Senior Economist - Supply Side, Labour and Surveillance Division, Directorate General Economics, European Central Bank

2012-2017

Senior Economist - Country Surveillance Division, Directorate General Economics, European Central Bank

2010-2012

Economist - EU Programme Country Design Division, Directorate General Economic and Financial Affairs, European Commission

2008-2010

Economist - Monetary Policy Division, Directorate General Economic and Financial Affairs, European Commission

2005-2008

Economist - Monetary Policy Division, Directorate Economics, Deutsche Bundesbank

2001-2005

Research and Teaching Assistant - Chair for International Economics, Directorate Economics, University of Hohenheim

Awards
2005

Südwestbank-Price (excellency of PhD thesis)

Teaching experience
2012

International Trade Theory and Policy, Directorate Economics, University of Hohenheim

2005

Seminar on Monetary Economics, Banco Central de Uruguay

2005

International Economics, University of Cluj, Romania

2001-2005

International Economics, Chair for International Economics, Directorate Economics, University of Hohenheim

11 November 2014
WORKING PAPER SERIES - No. 1740
Details
Abstract
This paper argues that, under certain conditions, firms consider export activity as a substitute of serving domestic demand. Our econometric model for six euro area countries suggests domestic demand pressure and capacity constraint restrictions as additional variables of a properly specified export equation. As an innovation to the literature, we assess the empirical significance through the logistic and the exponential variant of the non-linear smooth transition regression model. We find that domestic demand developments are relevant for the short-run dynamics of exports in particular during more extreme stages of the business cycle. A strong substitutive relationship between domestic and foreign sales can most clearly be found for Spain, Portugal and Italy providing evidence of the importance of sunk costs and hysteresis in international trade.
JEL Code
F14 : International Economics→Trade→Empirical Studies of Trade
C22 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models &bull Diffusion Processes
C50 : Mathematical and Quantitative Methods→Econometric Modeling→General
C51 : Mathematical and Quantitative Methods→Econometric Modeling→Model Construction and Estimation
F10 : International Economics→Trade→General
Network
Competitiveness Research Network
21 November 2016
WORKING PAPER SERIES - No. 1983
Details
Abstract
This paper examines whether European regions which incorporate banks with a higher intermediation quality grow faster and are more resilient to negative shocks than its less efficient peers. For this purpose, we measure a bank's intermediation quality by estimating its pro t and cost efficiency while taking the changing banking environment after the financial crisis into account. Next, we aggregate the efficiencies of all banks within a NUTS 2 region to obtain a regional proxy for fi nancial quality in twelve European countries. Our results show that relatively more pro t efficient banks foster growth in their region. The link between fi nancial quality and growth is valid both in the pre-crisis and post-crisis period. These results provide evidence to the importance of swiftly restoring bank pro tability in euro area crisis countries through addressing high non-performing loans ratios and decisive actions on bank recapitalization.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
O52 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Europe
2 February 2017
WORKING PAPER SERIES - No. 2011
Details
Abstract
This paper investigates the link between sovereign ratings and macroeconomic fundamentals for a group of euro area countries which recorded rating downgrades amid the euro area sovereign debt crisis. We apply an elaborated econometric estimation technique, based on a Bayesian ordered probit model, to understand how the decisions of rating agencies can be explained by economic developments. The estimated model re-produces historical ratings by using a small number of economic and institutional variables, which seem to effectively summarize the large number of criteria used by Moody
JEL Code
C25 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Discrete Regression and Qualitative Choice Models, Discrete Regressors, Proportions
G24 : Financial Economics→Financial Institutions and Services→Investment Banking, Venture Capital, Brokerage, Ratings and Ratings Agencies
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
H68 : Public Economics→National Budget, Deficit, and Debt→Forecasts of Budgets, Deficits, and Debt
10 April 2017
OCCASIONAL PAPER SERIES - No. 185
Details
Abstract
The euro area sovereign debt crisis has highlighted the importance of reducing public debt levels and building up sufficient fiscal buffers during normal and good times. It has also reaffirmed the need for a thorough debt sustainability analysis (DSA) to act as a warning system for national policies. This paper introduces a comprehensive DSA framework for euro area sovereigns that could be used for analysis of fiscal risks and vulnerabilities. Specifically, this framework consists of three main building blocks: (i) a deterministic DSA, which embeds debt simulations under a benchmark and various narrative shock scenarios; (ii) a stochastic DSA, providing for a probabilistic approach to debt sustainability; and (iii) other relevant indicators capturing liquidity and solvency risks. The information embedded in the three main DSA blocks can be summarised in a heat map, which can provide guidance on the overall assessment of risks to debt sustainability. This method reflects the need to have a broad-based assessment, cross-checking information and perspectives from various sources with a view to deriving a robust debt sustainability assessment.
JEL Code
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
H62 : Public Economics→National Budget, Deficit, and Debt→Deficit, Surplus
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
H68 : Public Economics→National Budget, Deficit, and Debt→Forecasts of Budgets, Deficits, and Debt
12 September 2017
WORKING PAPER SERIES - No. 2101
Details
Abstract
This paper investigates the link between corporate debt and investment for a group of fi ve peripheral euro area countries. Using firm-level data from 2005-2014, we postulate a non-linear corporate leverage-investment relationship and derive thresholds beyond which leverage has a negative and signi ficant impact on investment. The investment sensitivity of debt increased after 2008 when financial distress intensifi ed and fi rms had a lower capacity to finance investment from internal sources of funds. Our results also suggest that even moderate levels of debt can exert a negative influence on investment for smaller firms or when pro fitability is low.
JEL Code
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
F34 : International Economics→International Finance→International Lending and Debt Problems
G31 : Financial Economics→Corporate Finance and Governance→Capital Budgeting, Fixed Investment and Inventory Studies, Capacity
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
11 October 2017
WORKING PAPER SERIES - No. 2104
Details
Abstract
We show that the speed and type of corporate deleveraging depends on the interaction between corporate and financial sector health. Based on granular bank-firm data pertaining to small and medium-sized enterprises (SME) from five stressed and two non-stressed euro area economies, we show that “zombie” firms generally continued to lever up during the 2010–2014 period. Whereas relationships with stressed banks reduce SME leverage on average, we also show that zombie firms that are tied to weak banks in euro area periphery countries increase their indebtedness even further. Sustainable economic recovery therefore requires both: deleveraging of banks and firms.
JEL Code
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
22 June 2018
OCCASIONAL PAPER SERIES - No. 210
Details
Abstract
Structural policies in the euro area are of great interest for the Eurosystem, particularly as they can support the smooth functioning of the Economic and Monetary Union (EMU) and the effectiveness of monetary policy. This paper adopts a broad definition of structural policies, analysing not only the benefits of efficient labour, product and financial market regulations, but also emphasising the importance of good governance and efficient institutions that ensure high quality and impartial public services, the rule of law and the control of rent-seeking. The paper concludes that there are many opportunities for enhanced structural policies in EU and euro area countries which can yield substantial gains by boosting long-term income and employment growth and supporting social fairness, also via better and more equal opportunities. It provides empirical and model-based analyses on the impacts and the interactions of structural policies, highlighting synergies between growth and inclusiveness, while acknowledging that structural policy changes need to be country-specific to reflect national conditions and social preferences. Welldesigned structural policies would also strengthen economic resilience and convergence of Member States, bringing the euro area closer to the requirements of an optimal currency area and improving the transmission of monetary policy. The paper also discusses the political economy causes of the sluggish implementation of socially beneficial structural policies and assesses ways to deal with possible shortterm costs of reforms.
JEL Code
D60 : Microeconomics→Welfare Economics→General
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
H11 : Public Economics→Structure and Scope of Government→Structure, Scope, and Performance of Government
J08 : Labor and Demographic Economics→General→Labor Economics Policies
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
O43 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Institutions and Growth
2 December 2019
WORKING PAPER SERIES - No. 2334
Details
Abstract
We explore the interaction between labour market reforms and financial frictions. Our study combines a new cross-country reform database on labour market reforms with matched firm-bank data for nine euro area countries over the period 1999 to 2013. While we find that labour market reforms are overall effective in increasing employment, restricted access to bank credit can undo up to half of long-term employment gains at the firm-level. Entrepreneurs without sufficient access to credit cannot reap the full benefits of more flexible employment regulation.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
J21 : Labor and Demographic Economics→Demand and Supply of Labor→Labor Force and Employment, Size, and Structure
J60 : Labor and Demographic Economics→Mobility, Unemployment, Vacancies, and Immigrant Workers→General
K31 : Law and Economics→Other Substantive Areas of Law→Labor Law
2018
Journal of International Money and Finance
  • Gebauer, S., Setzer, R., Westphal, A.
2016
Economic Modelling
  • Belke, A., Haskamp, U., Setzer, R.
2015
Economic Modelling
  • Belke, A., Oeking, A., Setzer, R.
2011
European Journal of Political Economy
  • Setzer, R., van den Noord, P., Wolff, G.
2010
Journal of Banking & Finance
  • Belke, A., Orth, W., Setzer, R.
2009
International Economics and Economic Policy
  • Setzer, R., Wolff, G.
2008
Journal of Financial Transformation
Global excess liquidity does it matter for house and stock prices on a global scale?
  • Belke, A., Orth, W., Setzer, R.
2008
International Economics and Economic Policy
Sowing the seeds for the subprime crisis: does global liquidity matter for housing and other asset prices?
  • Belke, A., Orth, W., Setzer, R.
2007
FinanzArchiv: Public Finance Analysis
  • Belke, A., Baumgärtner, F., Schneider, F., Setzer, R.
2005
Économie & Prévision
  • Belke, A., Setzer, R.
2005
Ekonomia
  • Belke, A., Setzer, R.
2004
Intereconomics: Review of European Economic Policy
  • Belke, A., Setzer, R.
2004
Journal for Institutional Innovation, Development, and Transition
On the benefits of a stable exchange rate for the EU accession countries
  • Belke, A., Setzer, R.
2003
Zeitschrift für Wirtschaftspolitik
  • Setzer, R.
2003
Economic and Social Review
Costs of exchange rate volatility for labor markets: Empirical evidence from the CEE economies
  • Belke, A., Kaas, L., Setzer, R.
2003
Economic Change and Restructuring
  • Belke, A., Setzer, R.
2003
Perspektiven der Wirtschaftspolitik
  • Belke, A., Hebler, M., Setzer, R.
2011
ECFIN Occasional Paper Series, European Commission
The macroeconomic adjustment programmes to Greece, Ireland and Portugal
  • various
2010
European Economy - Economic Papers
  • Jevcak., A., Setzer, R., Suardi, M.
2009
European Economy - Economic Papers
  • Barrios, S., Iversen, P., Lewandowska, M., Setzer, R.
2009
European Economy - Economic Papers
Money demand in the euro area: new insights from disaggregated data
  • Setzer, R., Wolff, G.
2003
CEPR Discussion paper
  • Belke, A., Kaas, L., Setzer, R.