Lukas Hack

Welcome!

I am a Ph.D. candidate at the University of Mannheim and a member of the Bonn-Mannheim Collaborative Research Center Transregio 224, funded by the German Research Foundation (DFG). My main research fields are macroeconomics, monetary economics and public economics.

Curriculum Vitae

♦ Click title to see abstract.

Working Papers:

Identification of Systematic Monetary Policy
(with Klodiana Istrefi and Matthias Meier, December 2023)
Review of Economic Studies, revise and resubmit

Abstract
We propose a novel identification design to estimate the causal effects of systematic monetary policy on the propagation of macroeconomic shocks. The design combines (i)~a time-varying measure of systematic monetary policy based on the historical composition of hawks and doves in the Federal Open Market Committee (FOMC) with (ii) an instrument that leverages the mechanical FOMC rotation of voting rights. We apply our design to study the effects of government spending shocks. We find fiscal multipliers between two and three when the FOMC is dovish and below zero when it is hawkish. Narrative evidence from historical FOMC records corroborates our findings.

Abstract

We propose a novel identification design to estimate the causal effects of systematic monetary policy on the propagation of macroeconomic shocks. The design combines (i)~a time-varying measure of systematic monetary policy based on the historical composition of hawks and doves in the Federal Open Market Committee (FOMC) with (ii) an instrument that leverages the mechanical FOMC rotation of voting rights. We apply our design to study the effects of government spending shocks. We find fiscal multipliers between two and three when the FOMC is dovish and below zero when it is hawkish. Narrative evidence from historical FOMC records corroborates our findings.

[CEPR DP] [ECB WP] [Ungated] [Vox EU] [ECB Research Bulletin] [SUERF Policy Brief] [BibTex]

Work in progress:

Progressive Income Taxation and Inflation: The Macroeconomic Effects of Bracket Creep

Abstract
Under progressive taxation, inflation drives up tax rates if the schedule is not adjusted accordingly, leading to bracket creep effects. I propose a non-parametric decomposition of changes in tax rates to measure the empirical importance of bracket creep. Studying German administrative tax records, I show that bracket creep effects are of similar importance as discretionary tax changes. Bracket creep has decreased over time due to institutional changes, but the 2022 inflation surge led to a resurgence with sizeable bracket creep effects. Theoretically, I characterize the effects on labor supply and compute a theory-consistent measure of bracket creep – the indexation gap – that is used to discipline a New Keynesian model with incomplete markets. The model is used to study the propagation of inflationary shocks that partly propagate through bracket creep.

Abstract

Under progressive taxation, inflation drives up tax rates if the schedule is not adjusted accordingly, leading to bracket creep effects. I propose a non-parametric decomposition of changes in tax rates to measure the empirical importance of bracket creep. Studying German administrative tax records, I show that bracket creep effects are of similar importance as discretionary tax changes. Bracket creep has decreased over time due to institutional changes, but the 2022 inflation surge led to a resurgence with sizeable bracket creep effects. Theoretically, I characterize the effects on labor supply and compute a theory-consistent measure of bracket creep – the indexation gap – that is used to discipline a New Keynesian model with incomplete markets. The model is used to study the propagation of inflationary shocks that partly propagate through bracket creep.

The Systematic Origins of Monetary Policy Shocks
(with Klodiana Istrefi and Matthias Meier)

Abstract
We show that conventional identification strategies for monetary policy shocks yield contaminated shocks if systematic monetary policy varies over time. The contamination renders the (mis)identified shocks predictable by time variation in systematic monetary policy interacted with the macroeconomic variables to which monetary policy responds. Using a measure of US systematic monetary policy based on the historical composition of hawks and doves in the FOMC, we empirically confirm the prediction. We then propose a new series of monetary policy shocks that accounts for time variation in systematic monetary policy. Our new shocks have substantially stronger effects on inflation and output.

Abstract

We show that conventional identification strategies for monetary policy shocks yield contaminated shocks if systematic monetary policy varies over time. The contamination renders the (mis)identified shocks predictable by time variation in systematic monetary policy interacted with the macroeconomic variables to which monetary policy responds. Using a measure of US systematic monetary policy based on the historical composition of hawks and doves in the FOMC, we empirically confirm the prediction. We then propose a new series of monetary policy shocks that accounts for time variation in systematic monetary policy. Our new shocks have substantially stronger effects on inflation and output.

Managerial Decision-Making and Monetary Policy
(with Davud Rostam-Afschar)

Abstract
working paper coming soon

Transmission of Monetary Policy in a Currency Area with Heterogeneous Households
(with Hannes Twieling)

Abstract
working paper coming soon