Lukas Hack

Welcome!

I am a Post-Doctoral Researcher at ETH Zürich and at the University of Mannheim. I received a doctoral degree from the University of Mannheim in 2024. My main research fields are macroeconomics, monetary economics, economic history and public economics.

Curriculum Vitae

News and Upcoming Talks

RA Job: If you are a Zurich-based student interested to work on the intersection of macroeconomics and economic history, please see this Call for Applications

I received a SNF Spark grant worth CHF 97,000

My paper on the systematic origins of monetary policy shocks is now out as a Banque de France Working Paper and we make our shock time series available here

New working paper joint with Alessandro Franconi: Import Tariffs and the Systematic Response of Monetary Policy

Watch my 15 minute CEBRA Webinar on Which macroeconomic news matter for price setting?

Working Papers:

Identification of Systematic Monetary Policy [abstract]
(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]

Loanly Governments [abstract] (with Lukas Diebold)
In preparation for the NBER International Seminar on Macroeconomics

Abstract
We compile a new dataset on government liabilities by instrument for 33 advanced economies and document that a substantial share of government debt consists of loans rather than bonds. To study governments’ loan-bond portfolio choice, we exploit high-frequency variation in bond yields around sovereign credit rating announcements, which shift the demand for government liabilities. Our analysis yields three main findings. First, increasing bond yields cause the government to substitute from bond to loan-based borrowing. Second, this substitution is mirrored by foreign creditors, who reduce their direct bond holdings and increasingly provide funding indirectly through domestic bank loans. Third, this shift toward domestic bank loans is associated with elevated levels of financial distress. Finally, we discuss how these findings can be rationalized when repatriating government debt through domestic banks reduces sovereign default risk. This mitigates the initial bond yield increase, albeit at the expense of higher bank balance sheet risk.

Abstract

We compile a new dataset on government liabilities by instrument for 33 advanced economies and document that a substantial share of government debt consists of loans rather than bonds. To study governments’ loan-bond portfolio choice, we exploit high-frequency variation in bond yields around sovereign credit rating announcements, which shift the demand for government liabilities. Our analysis yields three main findings. First, increasing bond yields cause the government to substitute from bond to loan-based borrowing. Second, this substitution is mirrored by foreign creditors, who reduce their direct bond holdings and increasingly provide funding indirectly through domestic bank loans. Third, this shift toward domestic bank loans is associated with elevated levels of financial distress. Finally, we discuss how these findings can be rationalized when repatriating government debt through domestic banks reduces sovereign default risk. This mitigates the initial bond yield increase, albeit at the expense of higher bank balance sheet risk.

[Draft available upon request]

The Systematic Origins of Monetary Policy Shocks [abstract]
(with Klodiana Istrefi and Matthias Meier, February 2025)

Abstract
Conventional strategies to identify monetary policy shocks rest on the implicit assumption that systematic monetary policy is time-invariant. In an environment with time-varying systematic monetary policy, we formally show that these strategies yield shocks that are contaminated, leading to bias in estimated impulse responses. In line with our theoretical results, we empirically show that conventional monetary policy shocks are predictable by measured fluctuations in systematic monetary policy. We propose new shocks that are purged of this predictability. Our preferred new shocks show that U.S.~monetary policy affects inflation and output more strongly and faster compared to the corresponding conventional shocks.

Abstract

Conventional strategies to identify monetary policy shocks rest on the implicit assumption that systematic monetary policy is time-invariant. In an environment with time-varying systematic monetary policy, we formally show that these strategies yield shocks that are contaminated, leading to bias in estimated impulse responses. In line with our theoretical results, we empirically show that conventional monetary policy shocks are predictable by measured fluctuations in systematic monetary policy. We propose new shocks that are purged of this predictability. Our preferred new shocks show that U.S.~monetary policy affects inflation and output more strongly and faster compared to the corresponding conventional shocks.

[CEPR DP] [BdF WP] [Ungated] [Shock data] [BibTex]

Import Tariffs and the Systematic Response of Monetary Policy [abstract] (with Alessandro Franconi, December 2025)

Abstract
We estimate the macroeconomic effects of U.S. import tariff shocks using several tariff measurement and identification approaches. Tariff shocks reduce output but increase consumer prices. Monetary policy partially accommodates these shocks with a policy easing. To quantify the dependence on systematic monetary policy, we use empirically identified monetary policy shocks to construct counterfactuals that are robust against model misspecification and the Lucas critique. When monetary policy strictly stabilizes inflation, the output contraction at the trough is 36\% larger than in the baseline. In contrast, strict output stabilization implies a peak inflation effect that almost doubles, compared to the baseline.

Abstract

We estimate the macroeconomic effects of U.S. import tariff shocks using several tariff measurement and identification approaches. Tariff shocks reduce output but increase consumer prices. Monetary policy partially accommodates these shocks with a policy easing. To quantify the dependence on systematic monetary policy, we use empirically identified monetary policy shocks to construct counterfactuals that are robust against model misspecification and the Lucas critique. When monetary policy strictly stabilizes inflation, the output contraction at the trough is 36\% larger than in the baseline. In contrast, strict output stabilization implies a peak inflation effect that almost doubles, compared to the baseline.

[Ungated] [Online Appendix] [SSRN] [BibTex]

Which Macroeconomic News Matters for Price-Setting? [abstract] (with Davud Rostam-Afschar, May 2025)

Abstract
We examine how macroeconomic news affects firms’ extensive-margin price-setting plans in a survey that we rolled out with randomized daily invitations. These plans predict future realized inflation. Using a high-frequency event study framework, we find that inflation and employment surprises imply significant and sizable revisions in firms’ pricing plans. There is a limited role for news about the trade balance, but no significant role for other commonly studied data releases, e.g., industrial production. We also study news coverage and agents’ news search behavior, finding that the intensive-margin response of media coverage and news search may partly drive our main results.

Abstract

We examine how macroeconomic news affects firms’ extensive-margin price-setting plans in a survey that we rolled out with randomized daily invitations. These plans predict future realized inflation. Using a high-frequency event study framework, we find that inflation and employment surprises imply significant and sizable revisions in firms’ pricing plans. There is a limited role for news about the trade balance, but no significant role for other commonly studied data releases, e.g., industrial production. We also study news coverage and agents’ news search behavior, finding that the intensive-margin response of media coverage and news search may partly drive our main results.

[Ungated] [CESifo WP] [IZA DP] [SSRN] [CEBRA Webinar] [BibTex]

Understanding Firm Dynamics with Daily Data [abstract]
(with Davud Rostam-Afschar, January 2025)

Abstract
How quickly do firms adjust their plans and expectations after macroeconomic shocks? To answer this, we run a daily survey of German firms featuring randomized daily invitations. Thus, we receive daily survey responses with a stable composition of firms. We use this to construct daily time series and estimate the responses to three macroeconomic shock series. Our overarching finding is that firms respond within days to oil supply and monetary policy shocks during the post-Covid inflation surge. We further document heterogeneity across firm types and show that expectations are an important channel through which monetary policy transmits to firms’ plans.

Abstract

How quickly do firms adjust their plans and expectations after macroeconomic shocks? To answer this, we run a daily survey of German firms featuring randomized daily invitations. Thus, we receive daily survey responses with a stable composition of firms. We use this to construct daily time series and estimate the responses to three macroeconomic shock series. Our overarching finding is that firms respond within days to oil supply and monetary policy shocks during the post-Covid inflation surge. We further document heterogeneity across firm types and show that expectations are an important channel through which monetary policy transmits to firms’ plans.

[Ungated] [CRC DP] [SSRN] [Online Supplement] [BibTex] [Daily Business Database]

Progressive Income Taxation and Inflation: The Macroeconomic Effects of Bracket Creep [abstract] (August 2025)

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Abstract
Under nominal progressive taxation, inflation drives up tax rates if the schedule is not adjusted, leading to bracket creep. To isolate bracket creep from other sources of tax rate changes, I propose a non-parametric decomposition approach. Applying the decomposition to German administrative tax records, I find sizeable bracket creep episodes. While the overall importance of bracket creep has decreased over time due to institutional changes, the post-Covid inflation surge led to a resurgence. Theoretically, I show how bracket creep affects labor supply decisions in a partial equilibrium framework and estimate a theory-consistent measure of bracket creep, the indexation gap, which is used to discipline a New Keynesian model with incomplete markets. The model predicts that bracket creep leads to a transitory steepening of the Phillips curve arising endogenously in response to a monetary shock. Such a steepening may alleviate the output costs of monetary disinflation.

Abstract

Under nominal progressive taxation, inflation drives up tax rates if the schedule is not adjusted, leading to bracket creep. To isolate bracket creep from other sources of tax rate changes, I propose a non-parametric decomposition approach. Applying the decomposition to German administrative tax records, I find sizeable bracket creep episodes. While the overall importance of bracket creep has decreased over time due to institutional changes, the post-Covid inflation surge led to a resurgence. Theoretically, I show how bracket creep affects labor supply decisions in a partial equilibrium framework and estimate a theory-consistent measure of bracket creep, the indexation gap, which is used to discipline a New Keynesian model with incomplete markets. The model predicts that bracket creep leads to a transitory steepening of the Phillips curve arising endogenously in response to a monetary shock. Such a steepening may alleviate the output costs of monetary disinflation.

[Ungated] [SSRN] [FAZ Media Coverage (German)] [Reinhard Selten Award] [BibTex]

Work in progress:

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

Abstract
working paper coming soon