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Sebastian Schmidt
Research
- Division
Monetary Policy Research
- Current Position
-
Principal Economist
- Fields of interest
-
Macroeconomics and Monetary Economics,International Economics
- Other current responsibilities
- 2019-
CEPR Research Affiliate
- 2022-2023
Associate Editor, Macroeconomic Dynamics
- Education
- 2007-2012
Doctorate in Economics, Goethe University, Frankfurt, Germany
- Professional experience
- 2022-
Principal Economist - Monetary Policy Research Division, Directorate General Research, European Central Bank
- 2020-2021
Senior Economist - Monetary Policy Research Division, Directorate General Research, European Central Bank
- 2012-2019
Economist - Monetary Policy Research Division, Directorate General Research, European Central Bank
- 2008-2012
Research and teaching assistant - Goethe University, Frankfurt, Germany
- Teaching experience
- 2017-2018
Monetary and Fiscal Economics and Stabilization Policy (M.Sc. Programmes) - Eberhard-Karls-University Tübingen, Germany
- 8 October 2024
- DISCUSSION PAPER SERIES - No. 26Details
- Abstract
- The change in macroeconomic conditions since the ECB’s strategy review in 2021 towards an environment characterised by above-target inflation, high interest rates, and renewed concerns about elevated government debt has been a vocal reminder of the intricate interdependencies between monetary and fiscal policies. Against this background, our paper reviews the literature on how central banks’ ability to maintain price stability is shaped by their interactions with fiscal policy and the state of the economy. According to standard models, a policy framework aimed at price stability requires suitable commitments from both monetary and fiscal authorities. When public debt burdens become too high, price stability may be at risk. The paper also draws lessons on how to mitigate such risks.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
- 16 January 2024
- WORKING PAPER SERIES - No. 2889Details
- Abstract
- What are the macroeconomic consequences of a government that is limited in its willingness or ability to raise primary surpluses, and a central bank that accommodates its interest-rate policy to the fiscal conditions? I address this question in a dynamic stochastic sticky-price model with endogenous shifts between an “orthodox” and a “fiscally-dominant” policy regime. The risk of future regime shifts has encompassing effects on equilibrium. Inflation is systematically higher than it would be if fiscal policy always adjusted its primary surplus sufficiently and monetary policy was solely concerned with price stability. This inflation bias is increasing in the real value of government debt. Regime-switching probabilities are not invariant to policy. The central bank can attenuate the risk of a shift to the fiscally-dominant regime by raising the real interest rate sufficiently moderately when inflation increa
Herzog + Partner Munich Germany HPP Hentrich-Petschnigg & Partner Dusseldorf Germany Ingenhoven Overdiek Architekten Dusseldorf Germany Jourdan & Müller PAS Frankfurt a.M. Germany K+P Architekten u. Stadtplaner Munich Germany Kengo Kuma & Associates Tokyo Japan KHRAS Virum Denmark Kohn Pedersen Fox London United Kingdom KSP Engel und Zimmermann GmbH Frankfurt a.M. Germany Llewelyn-Davies London United Kingdom Maki and Associates Tokyo Japan mecanoo architects Delft The Netherlands Meyer en Van Schooten Architecten Amsterdam The Netherlands Morphosis Los Angeles United States Murphy Jahn Chicago United States MVRDV Rotterdam The Netherlands Neumann & Steiner Vienna Austria Neutelings Riedijk Architecten Rotterdam The Netherlands OMA Rotterdam The Netherlands Ortner & Ortner Baukunst GmbH Berlin Germany Paul Andreu Architecte / ADP Ingénierie Paris France Petzinka Pink Architekten Dusseldorf Germany Prof. Boris Podrecca Vienna Austria Rafael Vinoly Architects New York United States RHWL Architects London United Kingdom Richard Rogers Partnership London United Kingdom RKW Architektur + Städtebau GmbH & Co. KG Dusseldorf Germany Rocco Design Ltd. Hong Kong China Sam Stephenson / Traynor O'Toole Dublin Ireland Samyn and Partners Brussels Belgium schneider + schumacher Frankfurt a.M. Germany SIAT GmbH Munich Germany Skidmore, Owings & Merrill / NHT + Partner New York United States Steidle und Partner Munich Germany Studio Valle Progettazioni Rome Italy Tp bennett London United Kingdom United Architects / UN Studio Amsterdam The Netherlands Valode et Pistre Paris France van den Valentyn Cologne Germany Vasconi Associés Architectes Paris France
Group of "emerging young" architects
| Name | City | Country |
| ARGE – LOVE / LOMA | Graz/Kassel | Austria |
| Barkow Leibinger Architekten | Berlin | Germany |
| Bucholz/McEvoy Architects | Dublin | Ireland |
| Delugan_Meissl | Vienna | Austria |
| Grüntuch/Ernst Architekten | Berlin | Germany |
| IaN+ | Rome | Italy |
| Jakob + McFarlane | Paris | France |
| NOX | Rotterdam | The Netherlands |
| Pysall-Ruge Architekten | Berlin | Germany |
| VIIVA arkkitehtuuri | Turku | Finland |
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