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Author: mh

New paper in the JPE Macro

My paper Softening the Blow: U.S. State-Level Banking Deregulation and Sectoral Reallocation after the China Trade Shock with Lilia Ruslanova Habibulina is about to appear in the September 2024 issue of the Journal of Political Economy Macroeconomics. (follow the link above for open access. Link to replication files in the Harvard Dataverse).

The upshot: U.S. state-level banking deregulation during the 1980s  considerably dampened the fallout on local economies of the China trade shock a decade later. The reason: households in financially integrated areas could more easily borrow against their housing wealth to smooth consumption. This kept house prices and wages in the non-tradable sector up, facilitating labor reallocation away from manufacturing.

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Keynote at 2023 GPEG meeting.

At the 2023 meeting of the Global Economic Policy Group (GPEG), I gave a keynote lecture on US Banking deregulation and sectoral reallocation after the China trade shock. This year the meeting was hosted by Hans-Jörg Schmerer‘s group from FU Hagen (Germany’s remote learning unversity) at the FU campus in Nürnberg. This was a fun event and some pictures and programs of this year’s and previous editions can be found here. My keynote slides are available here. ( A revised version of the underlying paper is coming soon…)

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Of banks and crises: the 2022 Nobel Prize in Economics

An article (in German) about this year’s Nobel prize that I wrote with my colleagues Christian Ewerhart and Joachim Voth just appeared in the Swiss economic policy journal “Die Volkswirtschaft”. Learn more about why financial crises are hard to predict, why banks must be unstable, why the laureates’ work is super relevant in a world of digital currencies — and what the late Queen Elizabeth II has to do with it all: https://dievolkswirtschaft.ch/de/2022/11/nobelpreis-2022-von-banken-und-krisen/?v

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“The hikes of others”: some thoughts on the global tightening cycle after the Fed and SNB decisions

While the Fed’s 75bps hike on Wednesday 21st was in line with expectations, the market had priced in a 100 bps hike for the SNB. In this sense the 75bps announcement came as a dovish surprise, even though this still is the biggest SNB rate increase in more than 20 years.

While the SNB explicitly did not rule out further hikes in December and, if necessary, forex market intervention in the interim, it is noteworthy to what extent governor Thomas Jordan emphasized the role of international spillovers through the hiking of other central banks and the role of transitory inflation pressures in his opening statement and the subsequent media Q&A.

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Series of video interviews on energy crisis, inflation, (de-) globalization, China and government debt

Matthias Schober from the German personal finance education portal pfenningfabrik.de invited me for a series of half-hour videos in which we discuss the current global economic situation, ranging from the energy crisis, ECB monetary policy to China and government finances.

The first of the series, covering the energy crsis and inflation available here: https://www.youtube.com/watch?v=o-g2BHOsfPw

Update Sep 14th 2022: The second part , covering global power shifts and the economic outlook for China, US, Europe is now available here: https://www.youtube.com/watch?v=YgmGfuqAa7g

We are currently planning another interview on government debt for in a couple of weeks. Watch this space.

Update, Oct 26th 2022: The interview on government debt is available here: https://www.youtube.com/watch?v=_ICtvxqE3cM

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Germany’s first trade deficit since the 1990s…

Before the summer break I gave an interview to the New York-based Global Finance Magazine about what the first German trade deficit in almost three decades means and whether it is reason for deeper worry.

The gist of my argument is that the German public has long fetishised its current account surpluses as a sign of strength. It was not. Our research with Iryna Stewen and Michael Stiefel highlights that high surpluses actually reflected some of Germany’s structural weaknesses and were far from being an unmitigated sign of strength. That also means that a one-off deficit is nothing to worry about. But could the move into deficit reflect deeper challenges to Germany’s growth model? This is indeed likely to be the case. Read the full article here: https://www.gfmag.com/magazine/julyaugust-2022/germany-trade-deficit-surprise

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