What is the cost of sovereign default, and what makes default costly? This paper uses a novel econometric method – combining local projections and propensity score weighting as in Jordá and Taylor (2016) – to study these questions. We find that default generates a long-lasting output cost – 2.9% of GDP on impact and 4.4% […]

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 […]

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 […]

with Oscar Jordà and Alan M. Taylor — NBER Macroeconomics Annual, Vol. 31. In advanced economies, a century-long near-stable ratio of credit to GDP gave way to rapid financialization and surging leverage in the last forty years. This “financial hockey stick” coincides with shifts in foundational macroeconomic relationships beyond the widely-noted return of macroeconomic fragility […]

with Manual Funke and Christoph Trebesch — European Economic Review, forthcoming. Partisan conflict and policy uncertainty are frequently invoked as factors contributing to slow post-crisis recoveries. Recent events in Europe provide ample evidence that the political aftershocks of financial crises can be severe. In this paper we study the political fall‐out from systemic financial crises […]

with Oscar Jorda and Alan Taylor — Journal of Monetary Economics, Vol. 76, pages S1-S20. What risks do asset price bubbles pose for the economy? This paper studies bubbles in housing and equity markets in 17 countries over the past 140 years. History shows that not all bubbles are alike. Some have enormous costs for […]

with Carl-Ludwig Holtfrerich, Lars P. Feld, Werner Heun, Gerhard Illing, Gebhard Kirchgässner, Jürgen Kocka, Wolfgang Streeck, Uwe Wagschal, Stefanie Walter, Carl Christian von Weizsäcker. Seit der schweren Finanz- und Wirtschaftskrise 2007/2008, der Verankerung der Schuldenbremse im Grundgesetz der Bundesrepublik Deutschland 2009 und der Schuldenkrise einiger Eurostaaten seit 2010 wird das schon lange virulente Streitthema „Staatsschulden“ […]