Tilman Bletzinger
Monetary Policy
- Division
-
Capital Markets/Financial Structure
- Current Position
-
Lead Economist
- Fields of interest
-
Macroeconomics and Monetary Economics,Financial Economics
- Education
- 2014-2018
Doctorate in Economics, Goethe-University, Frankfurt am Main, Germany
- 2011-2014
Master in Quantitative Economics, Goethe-University, Frankfurt am Main, Germany
- 2008-2011
Bachelor in Economics, Maastricht University, the Netherlands & University of California, Los Angeles, USA
- Professional experience
- 2019-
Economist - Capital Markets/Financial Structure Division, Directorate General Monetary Policy, ECB
- 2016-2019
Economist - Risk Strategy Division, Directorate Risk Management, ECB
- 2012-2016
Research assistant - Institute for Monetary and Financial Stability, Goethe-University, Frankfurt am Main, Germany
- Teaching experience
- 2012-2016
Monetary and Fiscal Policy - Graduate School, Goethe-University, Frankfurt am Main, Germany
- 2009-2010
Quantitative Methods - School of Business and Economics, Maastricht University, the Netherlands
- 10 February 2017
- WORKING PAPER SERIES - No. 2019Details
- Abstract
- This paper uses two established DSGE models (QUEST III and Smets-Wouters) to assess the impact of fiscal spending cuts on output and, in particular, also on inflation in the euro area under alternative settings for monetary policy. We compare four different settings of constrained monetary policy, taking into account alternative agents’ expectations about future monetary policy. We illustrate that those expectations are even more important for the size of the fiscal multipliers than the difference between exogenously versus endogenously modelled constraints. We confirm the well-known finding that fiscal multipliers exhibit an over-proportional reaction when monetary policy is constrained. The novelty of our results is that this over-proportionality is stronger for the fiscal multiplier on inflation than on output. We relate this finding to the structural parameters of the models by means of a Global Sensitivity Analysis.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
- 5 June 2018
- WORKING PAPER SERIES - No. 2156Details
- Abstract
- This paper develops a tractable model of a monetary union with a sound fiscal governance structure and shows how in such environment the design of monetary policy above and at the lower bound constraint on short-term interest rates can be linked to well-known findings from the literature dealing with single closed economies. The model adds a portfolio balance channel to a New Keynesian two-country model of a monetary union. If the monetary union is symmetric and the portfolio balance channel is not active, the model becomes isomorphic to the canonical New Keynesian three-equation economy in which central bank purchases of long-term debt (QE) at the lower bound are ineffective. If the portfolio balance channel is active, QE becomes effective and we prove that for sufficiently small shocks there exists an interest rate rule augmented by QE at the lower bound which replicates the equilibrium allocation and the welfare level of a hypothetically unconstrained economy. Shocks large enough to push the whole yield curve to the lower bound require, in addition, forward guidance. We generalise these results to an asymmetric monetary union and illustrate them through simulations, distinguishing between asymmetric shocks and asymmetric structures. In general, asymmetries give rise to current account imbalances which are, depending on the degree of financial integration, funded by private capital imports or through the central bank balance sheet channel. Moreover, our findings support that at the lower bound, as long as asymmetries between countries result from shocks, outcomes under an unconstrained policy rule can be replicated via a symmetric QE design. By contrast, asymmetric structures of the countries which matter for the transmission of monetary policy can translate into an asymmetric QE design.
- JEL Code
- E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
- 26 June 2018
- RESEARCH BULLETIN - No. 47Details
- Abstract
- In response to the global financial crisis the central banks of many advanced economies have adopted large-scale asset purchase programmes, with particular prominence given to purchases of sovereign debt. These programmes – often labelled as quantitative easing or QE – are intended to overcome the lower-bound constraint on short-term interest rates in an environment of persistently low inflation rates. This article offers a conceptual perspective on a number of design issues of QE that are specific to monetary unions. In general, design options for QE depend on the degree of institutional completeness of a monetary union. This is illustrated with findings from a stylised model of a monetary union which assumes an environment in which the central bank can always be assured that national fiscal policies are sustainable. Such setting is conducive to a particularly effective design of QE.
- JEL Code
- E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
- 2021
- European Economic Review
- 2017
- Data in Brief
- 2017
- Economics Letters