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23.06.2023
Empirical Macroeconomics
The financial crisis in 2007/2008 marked the end of the Great Moderation in economies across the globe. Since then, many different new macroeconomic realities have emerged pertaining to the euro area (EA). Susanne Wellmann's dissertation studies three of them, all distinct, but equally important for policy making.
Susanne Wellmann's "Essays in Empirical Macroeconomics" at the Department of Macroeconomics was successfully defended in the presence of her reviewers Prof. Gernot J. Müller und Prof. Joachim Grammig.
First, the financial crisis had significant impact on public finances both in emerging and ad-vanced economies such as the EA. Credit conditions have diverged and interest rate spreads on sovereign bonds increased in particular in advanced economies potentially leading to real macroeconomic effects. We examine this issue more rigorously in Chapter 1 of this dissertation. Furthermore, the financial crisis has hit economies differently, not only with respect to public finances but also regarding real macroeconomic effects like unemployment, compare for in-stance the EA. In this context, in Chapter 2 we analyze whether and how labor migration can mitigate these adverse effects of business cycle fluctuations and thereby contribute to risk shar-ing in a currency union such as the US or the EA. Lastly, advanced economies have experi-enced a decade of low and stable inflation after the financial crisis in contrast to what econo-mists and policy makers expected. Thus, in Chapter 3 we take a closer look at inflation, particu-larly in the EA, and revisit the well-known Phillips curve. In doing so, we study whether the trade-off between inflation and unemployment still exists and what this means for the current high-inflation environment.
In sum, this dissertation highlights three distinct but intertwined new macroeconomic realities that have emerged in the aftermath of the financial crisis over the last decade. Hopefully, the findings presented here can contribute to a better understanding of each phenomenon individually as well as their joint macroeconomic significance.