Lukas Vogel - Academia.edu (original) (raw)

Papers by Lukas Vogel

International Finance

We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterf... more We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterfactual on how nominal exchange rate flexibility would have affected the German trade balance (TB) by simulating the shocks of the estimated model under a counterfactual flexible exchange rate regime. The actual and counterfactual TB trajectories are similar overall. Results suggest an around 2 pp lower trade surplus during 2012-15 together with a stronger real effective exchange rate in the counterfactual. The latter shows a similar upward trend in the TB, however, and the 2012-15 gap between actual and counterfactual closes at the end of the sample.

Journal of International Money and Finance

Marco Ratto (European Commission, Joint Research Centre) Werner Roeger (European Commission, DG E... more Marco Ratto (European Commission, Joint Research Centre) Werner Roeger (European Commission, DG ECFIN) Lukas Vogel (European Commission, DG ECFIN) The trade balances of the Euro Area (EA) and of the US have improved markedly after the Global Financial Crisis. This paper quantifies the drivers of EA and US economic fluctuations and external adjustment, using an estimated (1999-2017) three-region (US, EA, rest of world) DSGE model with trade in manufactured goods and in commodities. In the model, commodity prices reflect global demand and supply conditions. The paper highlights the key contribution of the post-crisis collapse in commodity prices for the EA and US trade balance reversal. Aggregate demand shocks originating in Emerging Markets too had a significant impact on EA and US trade balances. The broader lesson of this paper is that Emerging Markets and commodity shocks are major drivers of advanced countries' trade balances and terms of trade.

SSRN Electronic Journal, 2000

Economic Papers are written by the staff of the Directorate-General for Economic and Financial Af... more Economic Papers are written by the staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis. The views expressed are the author's alone and do not necessarily correspond to those of the European Commission.

OECD Economics Department Working Papers, 2009

OECD Economics …, 2009

... Lukas Vogel Elena Rusticelli Pete Richardson Stéphanie Guichard Christian Gianella ... impact... more ... Lukas Vogel Elena Rusticelli Pete Richardson Stéphanie Guichard Christian Gianella ... impact and dynamics of commodities, import prices and exchange rates on domestic inflation, which may have contributed to differences in policy stances during the boom in commodity prices ...

Journal of Economic Dynamics and Control, 2016

Economics Letters, 2008

This note investigates the interaction between nominal and real labour market rigidities. It show... more This note investigates the interaction between nominal and real labour market rigidities. It shows nominal wage rigidity to have little effect on the welfare loss from labour adjustment costs under a labour supply shock. This implies that the second best effect of nominal price stickiness under real wage persistence studied in Duval and Vogel (2007) does not apply to the propagation of supply shocks under nominal wage rigidity and labour adjustment costs. JEL classification: E24, E32, J23, J30

European Economy Economic Papers, 2009

The paper analyses the macroeconomic gain from cost savings in public procurement in an extended ... more The paper analyses the macroeconomic gain from cost savings in public procurement in an extended version of the QUEST III macroeconomic model. Lower labour tax rates as response to cost savings from cheaper procurement (0.5 pp mark-up decline per year over 10 years and 20% of procurement) raise GDP, employment and consumption by 0.1% after 5 and 0.1-0.2% after 50 years. Alternative policies, such as lower capital taxes or higher public investment, have comparable or stronger long-run GDP effects, lower or comparable consumption effects, and zero employment effects; the supply expansion under lower capital taxes and higher public investment derives from additional investment. Macroeconomic benefits are approximately linear in the amount of cost savings. The gains depend on key parameters, such as the elasticity of labour supply or the productivity of public capital.

The paper analyses China's external position in a multi-region macroeconomic model of the wor... more The paper analyses China's external position in a multi-region macroeconomic model of the world economy. The model includes a portfolio structure and Forex intervention to proxy net/gross and government/non-government foreign asset positions, capital controls and exchange rate management in China. The selected set of transition and globalisation shocks replicates China's external position well, suggesting that it reflects capital exports driven

Economic research paper on EMU and open economy macroeconomics The paper uses a 3-region version ... more Economic research paper on EMU and open economy macroeconomics The paper uses a 3-region version (small open economy in EMU, other euro area, rest of the world) of QUEST to assess the impact of structural reforms on external positions along two dimensions, namely the impact of flexibility and prudence on the prevention of imbalances and the contribution of structural reforms

The paper extends the QUEST III model by home production to discuss fiscal limits in an economy w... more The paper extends the QUEST III model by home production to discuss fiscal limits in an economy with tax avoidance. It finds that revenue-maximising labour and corporate tax rates in the benchmark model are relatively high (54% and 72%) compared to current EU-average implicit tax rates. No such limit is found for the consumption tax. Higher substitutability between market and

The paper analyses the impact of structural reforms on external positions in monetary union in a ... more The paper analyses the impact of structural reforms on external positions in monetary union in a 3-region version of QUEST III. Wage cost moderation and fiscal consolidation improve the current account balance in the medium term, but positive income effects tend to offset the initial increase in the long term. The general pattern is robust across alternative levels of initial

OECD Economics Department Working Papers, 2007

Page 1. Unclassified ECO/WKP(2007)33 Organisation de Coopération et de Développement Economiques ... more Page 1. Unclassified ECO/WKP(2007)33 Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development 04-Sep-2007 ...

Review of International Economics, 2013

The paper uses QUEST III to compare the impact of product market reform, labor market reform, and... more The paper uses QUEST III to compare the impact of product market reform, labor market reform, and fiscal devaluation on economic activity and external accounts in infinite-horizon and finite-horizon versions of the model for a small open economy in monetary union with tradable and non-tradable sectors. The impact of structural policies on external positions tends to be stronger and more persistent, but also more diverse in the finite-horizon specification because of the impact of structural reforms on financial wealth and its transmission to consumption demand in the finite-horizon setting. The improvement in the net foreign asset position tends to be stronger if structural reforms are accompanied by fiscal consolidation and if countries start with high pre-reform levels of net foreign debt. 1 1

The paper extends the QUEST III model by home production to discuss fiscal limits in an economy w... more The paper extends the QUEST III model by home production to discuss fiscal limits in an economy with tax avoidance. It finds that revenue-maximising labour and corporate tax rates in the benchmark model are relatively high (54% and 72%) compared to current EU-...

Economics Letters, 2011

This note investigates the interaction between nominal and real labour market rigidities. It show... more This note investigates the interaction between nominal and real labour market rigidities. It shows nominal wage rigidity to have little effect on the welfare loss from labour adjustment costs under a labour supply shock. This implies that the second best effect of nominal price stickiness under real wage persistence studied in Duval and Vogel (2007) does not apply to the propagation of supply shocks under nominal wage rigidity and labour adjustment costs. JEL classification: E24, E32, J23, J30

Economic Modelling, 2012

The paper analyses the impact of structural reforms on external positions in monetary union in a ... more The paper analyses the impact of structural reforms on external positions in monetary union in a 3-region version of QUEST III. Wage cost moderation and fiscal consolidation improve the current account balance in the medium term, but positive income effects tend to offset the initial increase in the long term. The general pattern is robust across alternative levels of initial foreign indebtedness. While lasting imbalance correction requires a contraction of debt-financed domestic demand, supply-side reform can mitigate the associated output contraction. A scenario is given as illustration that would reverse the 20% competitiveness loss in the EMU periphery during the 2000s and reduce foreign and government debt by 30% and 50% of GDP within ten years.

Abstract: The paper analyses China's external position in a multi-region macroeconomic model... more Abstract: The paper analyses China's external position in a multi-region macroeconomic model of the world economy. The model includes a portfolio structure and Forex intervention to proxy net/gross and government/non-government foreign asset positions, capital ...

International Finance

We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterf... more We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterfactual on how nominal exchange rate flexibility would have affected the German trade balance (TB) by simulating the shocks of the estimated model under a counterfactual flexible exchange rate regime. The actual and counterfactual TB trajectories are similar overall. Results suggest an around 2 pp lower trade surplus during 2012-15 together with a stronger real effective exchange rate in the counterfactual. The latter shows a similar upward trend in the TB, however, and the 2012-15 gap between actual and counterfactual closes at the end of the sample.

Journal of International Money and Finance

Marco Ratto (European Commission, Joint Research Centre) Werner Roeger (European Commission, DG E... more Marco Ratto (European Commission, Joint Research Centre) Werner Roeger (European Commission, DG ECFIN) Lukas Vogel (European Commission, DG ECFIN) The trade balances of the Euro Area (EA) and of the US have improved markedly after the Global Financial Crisis. This paper quantifies the drivers of EA and US economic fluctuations and external adjustment, using an estimated (1999-2017) three-region (US, EA, rest of world) DSGE model with trade in manufactured goods and in commodities. In the model, commodity prices reflect global demand and supply conditions. The paper highlights the key contribution of the post-crisis collapse in commodity prices for the EA and US trade balance reversal. Aggregate demand shocks originating in Emerging Markets too had a significant impact on EA and US trade balances. The broader lesson of this paper is that Emerging Markets and commodity shocks are major drivers of advanced countries' trade balances and terms of trade.

SSRN Electronic Journal, 2000

Economic Papers are written by the staff of the Directorate-General for Economic and Financial Af... more Economic Papers are written by the staff of the Directorate-General for Economic and Financial Affairs, or by experts working in association with them. The Papers are intended to increase awareness of the technical work being done by staff and to seek comments and suggestions for further analysis. The views expressed are the author's alone and do not necessarily correspond to those of the European Commission.

OECD Economics Department Working Papers, 2009

OECD Economics …, 2009

... Lukas Vogel Elena Rusticelli Pete Richardson Stéphanie Guichard Christian Gianella ... impact... more ... Lukas Vogel Elena Rusticelli Pete Richardson Stéphanie Guichard Christian Gianella ... impact and dynamics of commodities, import prices and exchange rates on domestic inflation, which may have contributed to differences in policy stances during the boom in commodity prices ...

Journal of Economic Dynamics and Control, 2016

Economics Letters, 2008

This note investigates the interaction between nominal and real labour market rigidities. It show... more This note investigates the interaction between nominal and real labour market rigidities. It shows nominal wage rigidity to have little effect on the welfare loss from labour adjustment costs under a labour supply shock. This implies that the second best effect of nominal price stickiness under real wage persistence studied in Duval and Vogel (2007) does not apply to the propagation of supply shocks under nominal wage rigidity and labour adjustment costs. JEL classification: E24, E32, J23, J30

European Economy Economic Papers, 2009

The paper analyses the macroeconomic gain from cost savings in public procurement in an extended ... more The paper analyses the macroeconomic gain from cost savings in public procurement in an extended version of the QUEST III macroeconomic model. Lower labour tax rates as response to cost savings from cheaper procurement (0.5 pp mark-up decline per year over 10 years and 20% of procurement) raise GDP, employment and consumption by 0.1% after 5 and 0.1-0.2% after 50 years. Alternative policies, such as lower capital taxes or higher public investment, have comparable or stronger long-run GDP effects, lower or comparable consumption effects, and zero employment effects; the supply expansion under lower capital taxes and higher public investment derives from additional investment. Macroeconomic benefits are approximately linear in the amount of cost savings. The gains depend on key parameters, such as the elasticity of labour supply or the productivity of public capital.

The paper analyses China's external position in a multi-region macroeconomic model of the wor... more The paper analyses China's external position in a multi-region macroeconomic model of the world economy. The model includes a portfolio structure and Forex intervention to proxy net/gross and government/non-government foreign asset positions, capital controls and exchange rate management in China. The selected set of transition and globalisation shocks replicates China's external position well, suggesting that it reflects capital exports driven

Economic research paper on EMU and open economy macroeconomics The paper uses a 3-region version ... more Economic research paper on EMU and open economy macroeconomics The paper uses a 3-region version (small open economy in EMU, other euro area, rest of the world) of QUEST to assess the impact of structural reforms on external positions along two dimensions, namely the impact of flexibility and prudence on the prevention of imbalances and the contribution of structural reforms

The paper extends the QUEST III model by home production to discuss fiscal limits in an economy w... more The paper extends the QUEST III model by home production to discuss fiscal limits in an economy with tax avoidance. It finds that revenue-maximising labour and corporate tax rates in the benchmark model are relatively high (54% and 72%) compared to current EU-average implicit tax rates. No such limit is found for the consumption tax. Higher substitutability between market and

The paper analyses the impact of structural reforms on external positions in monetary union in a ... more The paper analyses the impact of structural reforms on external positions in monetary union in a 3-region version of QUEST III. Wage cost moderation and fiscal consolidation improve the current account balance in the medium term, but positive income effects tend to offset the initial increase in the long term. The general pattern is robust across alternative levels of initial

OECD Economics Department Working Papers, 2007

Page 1. Unclassified ECO/WKP(2007)33 Organisation de Coopération et de Développement Economiques ... more Page 1. Unclassified ECO/WKP(2007)33 Organisation de Coopération et de Développement Economiques Organisation for Economic Co-operation and Development 04-Sep-2007 ...

Review of International Economics, 2013

The paper uses QUEST III to compare the impact of product market reform, labor market reform, and... more The paper uses QUEST III to compare the impact of product market reform, labor market reform, and fiscal devaluation on economic activity and external accounts in infinite-horizon and finite-horizon versions of the model for a small open economy in monetary union with tradable and non-tradable sectors. The impact of structural policies on external positions tends to be stronger and more persistent, but also more diverse in the finite-horizon specification because of the impact of structural reforms on financial wealth and its transmission to consumption demand in the finite-horizon setting. The improvement in the net foreign asset position tends to be stronger if structural reforms are accompanied by fiscal consolidation and if countries start with high pre-reform levels of net foreign debt. 1 1

The paper extends the QUEST III model by home production to discuss fiscal limits in an economy w... more The paper extends the QUEST III model by home production to discuss fiscal limits in an economy with tax avoidance. It finds that revenue-maximising labour and corporate tax rates in the benchmark model are relatively high (54% and 72%) compared to current EU-...

Economics Letters, 2011

This note investigates the interaction between nominal and real labour market rigidities. It show... more This note investigates the interaction between nominal and real labour market rigidities. It shows nominal wage rigidity to have little effect on the welfare loss from labour adjustment costs under a labour supply shock. This implies that the second best effect of nominal price stickiness under real wage persistence studied in Duval and Vogel (2007) does not apply to the propagation of supply shocks under nominal wage rigidity and labour adjustment costs. JEL classification: E24, E32, J23, J30

Economic Modelling, 2012

The paper analyses the impact of structural reforms on external positions in monetary union in a ... more The paper analyses the impact of structural reforms on external positions in monetary union in a 3-region version of QUEST III. Wage cost moderation and fiscal consolidation improve the current account balance in the medium term, but positive income effects tend to offset the initial increase in the long term. The general pattern is robust across alternative levels of initial foreign indebtedness. While lasting imbalance correction requires a contraction of debt-financed domestic demand, supply-side reform can mitigate the associated output contraction. A scenario is given as illustration that would reverse the 20% competitiveness loss in the EMU periphery during the 2000s and reduce foreign and government debt by 30% and 50% of GDP within ten years.

Abstract: The paper analyses China's external position in a multi-region macroeconomic model... more Abstract: The paper analyses China's external position in a multi-region macroeconomic model of the world economy. The model includes a portfolio structure and Forex intervention to proxy net/gross and government/non-government foreign asset positions, capital ...