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Timo Reinelt

Monetary Policy

Division

Capital Markets/Financial Structure

Current Position

Graduate Programme Participant

Fields of interest

Macroeconomics and Monetary Economics,Financial Economics

Email

timo.reinelt@ecb.europa.eu

Education
2016-2022

Ph.D. in Economics, University of Mannheim, Germany

2014-2016

M.Phil. in Economics, University of Oxford, UK

2011-2014

B.Sc. in Economics, University of Tübingen, Germany

2012

Visiting student, Brown University, US

Professional experience
2022-

Economist Graduate Programme Participant - Capital Markets/Financial Structure Division, Directorate General Monetary Policy, European Central Bank

Teaching experience
2018-2019

Advanced Macroeconomics (Ph.D.), TA - University of Mannheim

2018-2019

Intermediate Macroeconomics (B.Sc.), TA - University of Mannheim

2011-2014

Statistics (B.Sc.), TA - University of Tübingen

12 January 2023
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 8, 2022
Details
Abstract
This box looks at the link between firms’ financing conditions and the euro area business cycle. For information on financing conditions of firms, the box uses results from the Survey on the Access to Finance of Enterprises (SAFE). Monetary policy is shown to affect changes in firms’ financing gaps – the difference between the change in demand for and the change in the availability of external financing – as well as their expectations about future availability of finance. At the current juncture, firms report increasing financing gaps and a deterioration in their expectations about the availability of finance in the period ahead. Such responses from firms are associated with stronger concerns about finance at the firm level. Moreover, financing conditions matter for the aggregate business cycle: increasing financing gaps and lower expected availability of finance foreshadow lower GDP growth.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
13 July 2022
WORKING PAPER SERIES - No. 2681
Details
Abstract
We estimate the response of product-level retail prices to changes in the corporate tax rates paid by wholesale producers (pass-through). Under perfect competition in goods and factor markets, pass-through of corporate taxes should be zero, and their incidence mainly falls on factor prices. We use variation in tax rates across time and space in Germany, where municipalities set the local business tax once a year, to provide estimates of tax pass-through into the retail prices of more than 125,000 food and personal care products sold across Germany. By leveraging 1,058 changes in the local business tax rate between 2013 and 2017, we find that a one percentage point tax increase results in a 0.4% increase in the retail prices of goods produced by taxed _rms and purchased by consumers in the rest of Germany, who thus end up bearing a substantial share of the tax burden. This finding suggests that manufacturers may exploit their market power to shield profits from corporate taxes, complicating the analysis of the redistributive effects of tax reforms. We also explore various dimensions of heterogeneity in pass-through related to market power, including producer size, market shares, and retail store types. While producer heterogeneity does not seem to matter, the significant passthrough of corporate taxes to consumer prices in the low inflation period covered by our sample is mostly due to price changes in supermarkets and hypermarkets.
JEL Code
F12 : International Economics→Trade→Models of Trade with Imperfect Competition and Scale Economies, Fragmentation
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
E13 : Macroeconomics and Monetary Economics→General Aggregative Models→Neoclassical
H71 : Public Economics→State and Local Government, Intergovernmental Relations→State and Local Taxation, Subsidies, and Revenue
L11 : Industrial Organization→Market Structure, Firm Strategy, and Market Performance→Production, Pricing, and Market Structure, Size Distribution of Firms
27 May 2022
RESEARCH BULLETIN - No. 95
Details
Abstract
To what extent are corporate taxes passed on to consumers? And more generally, how do wholesaleproducers affect retail prices? Using data from Germany, where individual municipalities set local corporate taxrates, we shed new light on these questions. To estimate the impact of changes in producers’ tax rates onconsumer prices, we link 1,058 tax changes between 2013 and 2017 to changes in the retail prices of morethan 125,000 food and personal care products sold across Germany. A one percentage point increase in thelocal corporate tax leads on average to a 0.4% increase in the retail price of goods “exported” by the taxedfirms to stores in the rest of Germany. While neither the size of producers nor their market shares seem toaffect the strength of this pass-through, the type of store selling the product does: supermarkets andhypermarkets account for most of the increase in prices. Our findings suggest the following policy-relevantimplications: i) producers use their market power to shield profits from corporate taxes; ii) some retailers passon a large share of wholesale price changes; iii) the low-inflation period from 2013 to 2017 did not impair thepass-through of shocks to consumer prices.
JEL Code
F12 : International Economics→Trade→Models of Trade with Imperfect Competition and Scale Economies, Fragmentation
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
E13 : Macroeconomics and Monetary Economics→General Aggregative Models→Neoclassical
H71 : Public Economics→State and Local Government, Intergovernmental Relations→State and Local Taxation, Subsidies, and Revenue
L11 : Industrial Organization→Market Structure, Firm Strategy, and Market Performance→Production, Pricing, and Market Structure, Size Distribution of Firms
Network
Price Micro Setting Analysis Network (PRISMA)
26 November 2021
WORKING PAPER SERIES - No. 2617
Details
Abstract
Price inflation in the euro area has been stable and low since the Global Financial Crisis, despite notable changes in output and unemployment. We show that an increasing share of high markup firms is part of the explanation of why inflation remained stubbornly stable and low in the euro area over the past two decades. For this purpose, we exploit a rich firm-level database to show that over the period 1995–2018 the aggregate markup in the euro area has been on the rise, mainly on account of a reallocation towards high-markup firms. We document significant heterogeneity in markups across sectors and countries and, by linking these markup developments to the evolution of sectoral level producer and consumer price inflation, we find that (i) inflation in high-markup sectors tends to be less volatile than in low-markup sectors and (ii) inflation in high-markup sectors responds significantly less to oil supply, global demand and euro area monetary policy shocks.
JEL Code
D2 : Microeconomics→Production and Organizations
D4 : Microeconomics→Market Structure and Pricing
N1 : Economic History→Macroeconomics and Monetary Economics, Industrial Structure, Growth, Fluctuations
O3 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights
Network
Price Micro Setting Analysis Network (PRISMA)
25 June 2020
WORKING PAPER SERIES - No. 2427
Details
Abstract
We document three new empirical facts: (i) monetary policy shocks increase the markup dispersion across firms, (ii) they increase the relative markup of firms with stickier prices, and (iii) firms with stickier prices have higher markups. This is consistent with a New Keynesian model in which price rigidity is heterogeneous across firms. In the model, firms with more rigid prices optimally set higher markups and their markups increase by more after monetary policy shocks. The consequent increase in markup dispersion explains a negative aggregate TFP response. In a calibrated model, monetary policy shocks generate substantial fluctuations in aggregate productivity.
JEL Code
E30 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→General
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
Network
ECB Lamfalussy Fellowship Programme
2022
Review of Economics and Statistics (Accepted)
  • Meier, M. and Reinelt, T.