Abstract of associated article: Increasing the independence of a central bank from political influence, although ex-ante socially beneficial and initially successful in reducing inflation, would ultimately fail to lower inflation permanently. The smaller anticipated policy distortions implemented by a more independent central bank would induce the fiscal authority to decrease current distortions by increasing the deficit. Over time, inflation would increase to accommodate a higher public debt. By contrast, imposing a strict inflation target would lower inflation permanently and insulate the primary deficit from political distortions.

Graph and download economic data for Federal Debt: Total Public Debt (GFDEBTN) from Q1 1966 to Q1 2025 about public, debt, federal, government, and USA.

The German Internet Panel (GIP) is an infrastructure project. The GIP serves to collect data about individual attitudes and preferences which are relevant for political and economic decision-making processes. Experimental variations were used in the instruments. The questionnaire contains numerous randomisations as well as a cross-questionnaire experiment. Topics: Party preference (Sunday question); assessment of the importance of selected policy fields for the federal government (labour market, foreign policy, education and research, citizen participation, energy supply, food and agriculture, European unification, family, health care system, gender equality, internal security, personal rights, pension system, national debt, tax system, environment and climate protection, consumer protection, transport, defence, currency, economy, immigration and integration); currently most important policy areas for the respondent; satisfaction with the performance of the federal government (scalometer); satisfaction with the performance of the parties CDU/CSU, SPD, Bündnis 90/Die Grünen, Die Linke (scalometer); probability of an external event: Effects of the Ukraine crisis on the availability and price of Russian gas in Germany; Federal government should draw consequences from the Ukraine crisis and find alternatives to the purchase of Russian gas; assessment of political decisions of the Federal government on the introduction of a rent brake and a car toll, on the expansion of the digital infrastructure as well as on the re-regulation of prostitution; respective responsibility for the fact that corresponding laws have not yet been passed; expected change in unemployment due to the introduction of the minimum wage respectively in Eastern Germany, Western Germany and in Germany as a whole; opinion on the introduction of a statutory minimum wage; assessment of an alternative proposal to the minimum wage (state pays the difference between the real hourly wage and a gross wage of 8.50 euros); opinion on lowering the minimum wage in regions with high unemployment instead of the same minimum wage throughout Germany; self-assessment of patience and willingness to take risks (scalometer); preferred date for the debt brake (from 2015, from 2020, from 2025, after 2030 or not at all); assessment of the debt brake; assessment of the probability that one´s own federal state will manage without new debt from 2020; one´s own federal state should comply with the debt brake if not all 16 federal states manage without new debt from 2020; net household income resp. personal income; own willingness to pay an additional tax amount so that the own federal state can get along without new debts from 2020 onwards and the amount of this contribution (answer scale depending on household income and personal income); debts of cities and municipalities: Willingness to pay additional fees so that the municipality of residence can manage without new debts and the amount of this contribution (classified); willingness to agree to the merger of one´s own federal state with a neighbouring federal state; opinion on self-determination of the tax level by the federal states; opinion on the financing of infrastructure costs in poor regions via a common EU budget; opinion on EU loans within the framework of the euro bailout fund for heavily indebted member states; opinion on the fiscal equalisation system between the federal states; whether one´s own federal state belongs to the donor states or the recipient states; opinion on a law on the formation of reserves by the federal states for the pensions of state civil servants; demand for state measures to reduce income disparities; acceptance of tax evasion; inflation in Germany: Assessment of the price development for food and clothing in general and measured against the expectations of the European Central Bank (ECB) (inflation expectations); expected annual inflation rate in five and in ten years (medium-term and long-term inflation); assessment of the European Central Bank with regard to price stability in the Eurozone; preferred combination of the amount of monthly expenditure and the amount of a loan repayment; reception frequency of news in general and of news on the topic of economy. Demography: sex; citizenship; year of birth (categorised); highest school-leaving qualification; highest professional qualification; marital status; household size; employment status; private internet use; federal state. Additionally coded were: Interview date; year of recruitment; questionnaire evaluation; overall interview assessment; unique ID identifier, household identifier and person identifier within household. Das German Internet Panel (GIP) ist ein Infrastrukturprojekt. Das GIP dient der Erhebung von Daten über individuelle Einstellungen und Präferenzen, die für politische und ökonomische Entscheidungsprozesse relevant sind. Es wurden experimentelle Variationen in den Instrumenten eingesetzt. Der Fragebogen enthält zahlreiche Randomisierungen sowie ein fragebogenübergreifendes Experiment. Themen: Parteipräferenz (Sonntagsfrage); Einschätzung der Wichtigkeit ausgewählter Politikfelder für die Bundesregierung (Arbeitsmarkt, Außenpolitik, Bildung und Forschung, Bürgerbeteiligung, Energieversorgung, Ernährung und Landwirtschaft, Europäische Einigung, Familie, Gesundheitssystem, Gleichstellung von Frauen und Männern, Innere Sicherheit, Persönlichkeitsrechte, Rentensystem, Staatsverschuldung, Steuersystem, Umwelt und Klimaschutz, Verbraucherschutz, Verkehr, Verteidigung, Währung, Wirtschaft, Zuwanderung und Integration); derzeit wichtigste Politikfelder für den Befragten; Zufriedenheit mit den Leistungen der Bundesregierung (Skalometer); Zufriedenheit mit den Leistungen der Parteien CDU/CSU, SPD, Bündnis 90/Die Grünen, Die Linke (Skalometer); Wahrscheinlichkeit eines von außen wirkenden Ereignisses: Auswirkungen der Ukraine-Krise auf die Verfügbarkeit und den Preis von russischem Gas in Deutschland; Bundesregierung sollte Konsequenzen aus der Ukraine-Krise ziehen und Alternativen zum Bezug von russischem Gas finden; Beurteilung von politischen Entscheidungen der Bundesregierung zur Einführung einer Mietpreisbremse und einer Pkw-Maut, zum Ausbau der digitalen Infrastruktur sowie zur Neuregulierung von Prostitution; jeweilige Verantwortlichkeit für die bisher nicht erfolgte Verabschiedung entsprechender Gesetze; erwartete Veränderung der Arbeitslosigkeit durch die Einführung des Mindestlohns jeweils in Ostdeutschland, Westdeutschland und in Deutschland insgesamt; Meinung zur Einführung eines gesetzlichen Mindestlohns; Bewertung eines Alternativvorschlags zum Mindestlohn (Staat zahlt Differenz zwischen dem realen Stundenlohn und einem Bruttolohn von 8,50 Euro); Meinung zur Senkung des Mindestlohns in Regionen mit hoher Arbeitslosigkeit statt gleicher Mindestlohn in ganz Deutschland; Selbsteinschätzung der Geduld und der Risikobereitschaft (Skalometer); präferierter Zeitpunkt für die Schuldenbremse (ab 2015, ab 2020, ab 2025, nach 2030 oder überhaupt nicht); Bewertung der Schuldenbremse; Einschätzung der Wahrscheinlichkeit, dass das eigene Bundesland ab 2020 ohne neue Schulden auskommt; eigenes Bundesland sollte Schuldenbremse einhalten, falls nicht alle 16 Bundesländer ab 2020 ohne neue Schulden auskommen; Haushaltsnettoeinkommen bzw. persönliches Einkommen; eigene Bereitschaft zur Zahlung eines zusätzlichen Steuerbetrages, damit das eigene Bundesland ab 2020 ohne neue Schulden auskommt und Höhe dieses Beitrags (Antwortskala abhängig vom Haushaltseinkommen und dem persönlichen Einkommen); Schulden von Städten und Gemeinden: Bereitschaft zur Zahlung zusätzlicher Gebühren, damit die Wohngemeinde ohne neue Schulden auskommt und Höhe diese Betrages (klassiert); Bereitschaft, dem Zusammenschluss des eigenen Bundeslandes mit einem benachbarten Bundesland zuzustimmen; Meinung zur Selbstbestimmung der Steuerhöhe durch die Bundesländer; Meinung zur Finanzierung der Infrastrukturkosten in armen Regionen über einen gemeinsamen EU-Haushalt; Meinung zu EU-Krediten im Rahmen des Euro-Rettungsschirms für stark verschuldete Mitgliedsstaaten; Meinung zum Länderfinanzausgleich; Zugehörigkeit des eigenen Bundeslandes zu den Geberländern oder Nehmerländern; Meinung zu einem Gesetz zur Bildung von Rücklagen durch die Bundesländer für die Pensionen von Landesbeamten; Forderung nach staatlichen Maßnahmen zur Verringerung von Einkommensunterschieden; Akzeptanz von Steuerhinterziehung; Inflation in Deutschland: Einschätzung der Preisentwicklung für Lebensmittel und Kleidung allgemein und gemessen an den Erwartungen der Europäischen Zentralbank (EZB) (Inflationserwartung); erwarte jährliche Inflationsrate in fünf und in zehn Jahren (mittelfristige und langfristige Inflation); Beurteilung der Europäischen Zentralbank im Hinblick auf die Preisstabilität in der Eurozone; präferierte Kombination der Höhe von monatlichen Ausgaben und der Höhe einer Kreditrückzahlung; Rezeptionshäufigkeit von Nachrichten allgemein und von Nachrichten zum Thema Wirtschaft. Demographie: Geschlecht; Staatsbürgerschaft; Geburtsjahr (kategorisiert); höchster Schulabschluss; höchste berufliche Qualifikation; Familienstand; Haushaltsgröße; Erwerbsstatus; private Internetnutzung; Bundesland. Zusätzlich verkodet wurde: Interviewdatum; Jahr der Rekrutierung; Fragebogenevaluation; Beurteilung der Befragung insgesamt; eindeutige ID-Kennung, Haushalts-Kennung und Personen-Kennung innerhalb des Haushalts.

Monetary policy is generally regarded as a central element in the attempts of policy makers to attenuate business-cycle fluctuations. According to the New Keynesian paradigm, central banks are able to stimulate or depress aggregate demand in the short run by adjusting their nominal interest rate targets. The effects of interest rate changes on aggregate consumption, the largest component of aggregate demand, are well understood in the context of this paradigm, on which the canonical "workhorse'' model used in monetary policy analysis is grounded. A key feature of the model is that aggregate consumption is fully described by the amount of goods consumed by a representative household. A decline in the policy rate for instance implies that the real interest rate declines, the representative household saves less and hence increase its demand for consumption. At the same time, general equilibrium effects let labour income grow causing consumption to increase further. However, the mechanism outlined above ignores a considerable amount of empirically-observed heterogeneity among households. For example, households with a higher earnings elasticity to interest rate changes benefit more from a rate cut than those with a lower elasticity; households with large debt positions are at a relative advantage over households with large bond holdings; and households with low exposure to inflation are relatively better off than those holding a sizeable amount of nominal assets. As a result, the contribution to the aggregate consumption response differs substantially across households, implying that monetary expansions and tightenings produce relative "winners'' and relative "losers''. The aim of the project laid out in this proposal is to give a disaggregated account of the heterogeneous effects of monetary-policy induced interest rate changes on household consumption and a detailed analysis of the channels underlying them. Additionally, it seeks to draw conclusions about the determinants of the strength of the transmission mechanism of monetary policy. To do so, it relies on a large panel comprising detailed data from the universe of all households residing in Norway between 1993 and 2015 supplemented with additional micro-data provided by the European Commission. I will be assisted by two project partners, Pascal Paul who is a member of the Research Department of the Federal Reserve Bank of San Francisco and Martin Holm who is affiliated with the Research Unit of Statistics Norway and the University of Oslo. In addition, I would like to collaborate with and help train a doctoral student based at the University of Lausanne on this project. Existing empirical studies of the consumption response to monetary policy at the micro level rely on survey data. Therefore, they are subject to a number of severe data limitations. The surveys employed typically have either no or only a short panel dimension, suffer from attrition, include only limited information on income and wealth, are top-coded, and contain a significant amount of measurement error. The administrative data set provided to us by Statistics Norway suffers from none of these issues, implying that we are in a unique position to evaluate the household-level effects of policy rate changes. In a first step, we use forecasts published by the Norwegian central bank to derive monetary policy shocks that are robust to the simultaneity problem inherent in the identification of the effects of monetary policy following Romer and Romer (2004). We then confront the micro-data with the estimated shocks to study the consumption response along different segments of the income and wealth distribution and to test the importance of heterogeneity in labour earnings, financial income, liquid assets, inflation exposure and interest rate exposure among others. The findings will be of high relevance as they will not only allow us to evaluate channels hypothesised in the analytical literature, improve our understanding of the monetary policy transmission mechanism and its distributional consequences but also serve as a benchmark for structural models built both by theorists and practitioners.