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Research and public interest on economic inequality have grown over the last years. Family firms and the concentration of wealth and power in the hands of a few wealthy business families have been discussed as both a cause and a consequence of economic inequality. Yet, so far, we lack knowledge about the relationship between economic inequality and the share of family firms in an economy. Our study investigates how the share of family-controlled public firms correlates with various measures of income and wealth inequality. The results show that a higher share of public family-controlled firms leads to more income inequality in a country. This effect is particularly pronounced for the middle of the income distribution as opposed to the top quantiles. Redistribution only mitigates this effect to some extent, as the effect is significant for market income and disposable income. We also find that a higher share of family-controlled firms contributes to an increase in wealth inequality. Our results are of economic relevance as, for instance, a one standard deviation change in the share of family-controlled firms leads to an increase of around 1.4 percentage points in the Gini coefficients for market income, disposable income, and wealth.

In Reaktion auf die Coronakrise hat das deutsche Parlament bereits im März 2020 die Möglichkeit zur Mietstundung und die Aussetzung der Insolvenzantragspflicht beschlossen. Diese temporären Maßnahmen sollten die Zeit überbrücken, bis staatliche Hilfe die Betroffenen erreicht. Da private Haushalte u.a. durch Kurzarbeit vor erheblichen Einkommenseinschnitten stehen, verlagert sich das Problem der Insolvenz jedoch lediglich auf einen späteren Zeitpunkt. Um dies zu verhindern, diskutieren wir ein zweckgebundenes, monetäres Substitut für das ausfallende Einkommen, gekoppelt an staatliche Leistungen. Dadurch verschiebt sich bei Kreditverträgen das Ende der Laufzeit, da auch unser Instrument nur eine Überbrückung darstellt. Im Gegensatz zu den bisherigen Maßnahmen wird zum einen der Geldstrom weitestgehend aufrecht erhalten und zum anderen können die Kosten der Krise aus der Realwirtschaft herausgeleitet werden. Das monetäre Substitut kann für Kapitalzahlungen entlang der Wirtschaftskette bis zum Bankensektor weitergeleitet werden. Der Höhe entsprechend sollte die EZB die Eigenkapitalanforderungen der Geschäftsbanken vorübergehend senken. Wir argumentieren, dass die aktuelle Rezession rein exogen und somit die Vermeidung von daraus resultierenden Privatinsolvenzen effizient ist. Zudem kann unser Instrument den Nachfrageeinbruch abmildern und Planungssicherheit schaffen.

We examine the degree and sources of disagreement between the Federal Open Market Committee (FOMC) and the Federal Reserve's (Fed's) staff about the appropriate policy rate for the period 1987-2011. For that purpose, we compute a counterfactual interest rate for the Fed's staff , based on its own Greenbook forecasts and a Taylor (1993) rule, and compare it with the actual target rate. First, we find that the FOMC behaved more hawkish (dovish) during the 1990s (during the early 2000s) compared to the suggestions of the Fed's staff. Second, we reveal that a higher share of hawkish dissents, a higher share of voting women, a more experienced FOMC, and a higher share of members with a background in finance, the government, or the Bank staff are associated with relatively more hawkish monetary policy. In addition, the FOMC is found to prefer tighter monetary policy under a Democratic President, if there is a clear majority in the Congress, and during tranquil times.

Both from theoretical and practical viewpoints, I argue that the New Keynesian model's forward-looking IS curve should be derived by quadratic approximation. This leaves uncertainty in the basic three-equation model. After adding exogenous AR(1) processes, I examine the results by numerical simulation. First, I derive a reduced-form solution for the nominal rate of interest which describes the equilibrium behavior under optimal discretion. Focusing on the persistence parameter, the equilibrium will be simulated and compared to the model version containing the certainty equivalence. In a next step, impulse response functions show the adjustments over time after a cost shock. As a result, accounting for uncertainty can lead to lower interest rates of roughly 25 basis points compared to the case without uncertainty.