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]

The Systematic Origins of Monetary Policy Shocks
(with Klodiana Istrefi and Matthias Meier, May 2024)

Abstract
Conventional strategies to identify monetary policy shocks rest on the implicit assumption that systematic monetary policy is constant over time. We formally show that these strategies do not isolate monetary policy shocks in an environment with time-varying systematic monetary policy. Instead, they are contaminated by systematic monetary policy and macroeconomic variables, leading to contamination bias in estimated impulse responses. Empirically, we show that Romer and Romer (2004) monetary policy shocks are indeed predictable by fluctuations in systematic monetary policy. Instead, we propose a new monetary policy shock that is orthogonal to systematic monetary policy. Our shock suggests U.S. monetary policy has shorter lags and stronger effects on inflation and output.

Abstract

Conventional strategies to identify monetary policy shocks rest on the implicit assumption that systematic monetary policy is constant over time. We formally show that these strategies do not isolate monetary policy shocks in an environment with time-varying systematic monetary policy. Instead, they are contaminated by systematic monetary policy and macroeconomic variables, leading to contamination bias in estimated impulse responses. Empirically, we show that Romer and Romer (2004) monetary policy shocks are indeed predictable by fluctuations in systematic monetary policy. Instead, we propose a new monetary policy shock that is orthogonal to systematic monetary policy. Our shock suggests U.S. monetary policy has shorter lags and stronger effects on inflation and output.

[CEPR DP] [Ungated] [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.

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