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State-of-the-art Earth system models typically employ grid spacings of O(100 km), which is too coarse to explicitly resolve main drivers of the flow of energy and matter across the Earth system. In this paper, we present the new ICON-Sapphire model configuration, which targets a representation of the components of the Earth system and their interactions with a grid spacing of 10 km and finer. Through the use of selected simulation examples, we demonstrate that ICON-Sapphire can (i) be run coupled globally on seasonal timescales with a grid spacing of 5 km, on monthly timescales with a grid spacing of 2.5 km, and on daily timescales with a grid spacing of 1.25 km; (ii) resolve large eddies in the atmosphere using hectometer grid spacings on limited-area domains in atmosphere-only simulations; (iii) resolve submesoscale ocean eddies by using a global uniform grid of 1.25 km or a telescoping grid with the finest grid spacing at 530 m, the latter coupled to a uniform atmosphere; and (iv) simulate biogeochemistry in an ocean-only simulation integrated for 4 years at 10 km. Comparison of basic features of the climate system to observations reveals no obvious pitfalls, even though some observed aspects remain difficult to capture. The throughput of the coupled 5 km global simulation is 126 simulated days per day employing 21 % of the latest machine of the German Climate Computing Center. Extrapolating from these results, multi-decadal global simulations including interactive carbon are now possible, and short global simulations resolving large eddies in the atmosphere and submesoscale eddies in the ocean are within reach.

Defence date: 11 May 2022 Examining Board : Prof. Evi Pappa (Universidad Carlos III Madrid); Prof. Leonardo Melosi (Federal Reserve Bank of Chicago); Dr. Philippe Andrade (Federal Reserve Bank of Boston); Dr. Marek Jarociński (European Central Bank) This thesis investigates the dynamics of inflation expectations with a particular focus on survey data. It aims to further the understanding of what drives inflation expectations and what are the implications of changes in inflation expectations for economic choices. The first chapter examines to what extent monetary policy moves household inflation expectations. More specifically, I study the effect of different types of monetary policy announcements on household inflation expectations based on micro data from a survey of German households. As unique feature, interviews of the survey were conducted both shortly before and after monetary policy events. This timing provides a natural experiment to identify the immediate effects of policy announcements on household inflation expectations. In contrast to most existing studies, the availability of the survey over a period of 15 years also allows me to exploit the time-series dimension to estimate how policy announcements affect household inflation expectations over the medium-term. I find that policy rate announcements lead to quick and significant adjustments in household inflation expectations with the effect peaking after half a year. Announcements about forward guidance and quantitative easing, on the other hand, have only small and delayed effects. My results suggest that monetary policy announcements can influence household expectations but further improvements in communication seem to be necessary to reach the general public more effectively. In particular, in an environment where policy rates are constrained by the effective lower bound, it may be very hard for central banks to influence household expectations. In the second chapter, joint with Evi Pappa and Alejandro Vicondoa, we focus on expectations about inflation in the medium to long run and study the implications of changes in these expectations for households’ economic choices. We identify in a SVAR shocks that best explain future movements in different measures of underlying inflation at a five-year horizon and label them as news augmented shocks to underlying inflation. Independently of the measure used, such shocks raise the nominal rate and inflation persistently, while they induce mild and short-lived increases in economic activity. The extracted inflation shocks have differential distributional effects. They increase significantly and persistently the consumption of mortgagors and homeowners. Differently from the traditional monetary policy disturbances, news augmented shocks to underlying inflation induce a positive wealth effect for mortgagors and homeowners, driven by a reduction in the real mortgage payments and a persistent increase in real house prices that they induce. The third chapter, joint with Jonas Fisher and Leonardo Melosi, is also about long-run inflation expectations but in this case the focus is on professional forecasters. We use panel data from the U.S. Survey of Professional Forecasters to estimate a model of individual forecaster behavior in an environment where inflation follows a trend-cycle time series process. Our model allows us to estimate the sensitivity of forecasters’ long-run expectations to incoming inflation and news about future inflation, and measure the coordination of beliefs about future inflation. We use our model of individual forecasters to study average long-run inflation expectations. Short term changes in inflation have small effects on average expectations; the sensitivity to news is over twice as large, but is still relatively small. These findings provide a partial explanation for why the anchoring and subsequent de-anchoring of average inflation expectations over 1991 to 2020 were such long-lasting episodes. Our model suggests coordination of beliefs also played a role, slowing down but not preventing the pull on average expectations from inflation running persistently below target. We apply our model to the case of a U.S. central banker setting policy in September 2021. Our results suggest the high inflation readings of mid-2021 would have to be followed by overshooting of the Fed’s target generally at the high end of the Fed’s Summary of Economic Projections to re-anchor long term expectations at their pre-Great Recession level. 1 Central Bank Communication with the General Public: Survey Evidence from Germany 1.1 Introduction 1.2 Data and descriptive evidence 1.3 Identification approach and main results 1.4 Discussion 1.5 Inflation expectations and consumer spending 1.6 Conclusion 2 Uncovering the heterogeneous effects of news shocks to underlying inflation 32 2.1 Introduction 2.2 Identifying News Shocks to Underlying Inflation 2.3 Macroeconomic Effects 2.4 Estimation of Heterogeneous Effects 2.5 Comparison with Monetary Policy Shocksclusion 3 Anchoring long-run inflation expectations in a panel of professional forecasters 3.1 Introduction 3.2 Relation to the literature 3.3 The Model 3.4 Estimation 3.5 Data 3.6 Estimates 3.7 Inflation expectations through the lens of the model 3.8 Re-Anchoring U.S. Inflation Expectations 3.9 Conclusion -- References -- A Appendix to Chapter 1 -- A.1 GfK household survey -- A.2 Monetary policy surprises -- A.3 Additional event study results -- A.4 Additional local projection results -- A.5 Dynamic effects based on pseudo panel approach -- A.6 The effects on quantitative inflation expectations -- A.7 Financial market responses -- B Appendix to Chapter 2 -- B.1 Data Appendix -- B.2 Series of underlying inflation -- B.3 Correlation with monetary policy/inflation target shocks -- B.4 Validation of the Identified Shock -- B.5 IRFs Additional Variables -- B.6 VAR Robustness Analysis -- B.7 LP IRFs of VAR variables -- B.8 VAR IRFs of consumption responses by housing tenure -- B.9 Additional LP results -- B.10 Alternative dimensions of heterogeneity -- B.11 Robustness of Baseline Heterogeneous Effects -- B.12 Comparison with monetary policy shocks -- C Appendix to Chapter 3 -- C.1 Definition of matrices in subsection 3.3.2 and section 3.4 -- C.2 Model derivations -- C.3 Initial conditions for estimation -- C.4 Selection of forecasters -- C.5 Volatility of Expectations -- C.6 Historical decomposition -- C.7 Robustness of panel estimation -- C.8 Projection exercise

We introduce and evaluate aerosol simulations with the global aerosol–climate model ECHAM6.3–HAM2.3, which is the aerosol component of the fully coupled aerosol–chemistry–climate model ECHAM–HAMMOZ. Both the host atmospheric climate model ECHAM6.3 and the aerosol model HAM2.3 were updated from previous versions. The updated version of the HAM aerosol model contains improved parameterizations of aerosol processes such as cloud activation, as well as updated emission fields for anthropogenic aerosol species and modifications in the online computation of sea salt and mineral dust aerosol emissions. Aerosol results from nudged and free-running simulations for the 10-year period 2003 to 2012 are compared to various measurements of aerosol properties. While there are regional deviations between the model and observations, the model performs well overall in terms of aerosol optical thickness, but may underestimate coarse-mode aerosol concentrations to some extent so that the modeled particles are smaller than indicated by the observations. Sulfate aerosol measurements in the US and Europe are reproduced well by the model, while carbonaceous aerosol species are biased low. Both mineral dust and sea salt aerosol concentrations are improved compared to previous versions of ECHAM–HAM. The evaluation of the simulated aerosol distributions serves as a basis for the suitability of the model for simulating aerosol–climate interactions in a changing climate., Geoscientific Model Development, 12 (4), ISSN:1991-9603, ISSN:1991-959X

This paper introduces and evaluates the second version of the global aerosol-climate model ECHAM-HAM. Major changes have been brought into the model, including new parameterizations for aerosol nucleation and water uptake, an explicit treatment of secondary organic aerosols, modified emission calculations for sea salt and mineral dust, the coupling of aerosol microphysics to a two-moment stratiform cloud microphysics scheme, and alternative wet scavenging parameterizations. These revisions extend the model's capability to represent details of the aerosol lifecycle and its interaction with climate. Nudged simulations of the year 2000 are carried out to compare the aerosol properties and global distribution in HAM1 and HAM2, and to evaluate them against various observations. Sensitivity experiments are performed to help identify the impact of each individual update in model formulation. Results indicate that from HAM1 to HAM2 there is a marked weakening of aerosol water uptake in the lower troposphere, reducing the total aerosol water burden from 75 Tg to 51 Tg. The main reason is the newly introduced κ-Köhler-theory-based water uptake scheme uses a lower value for the maximum relative humidity cutoff. Particulate organic matter loading in HAM2 is considerably higher in the upper troposphere, because the explicit treatment of secondary organic aerosols allows highly volatile oxidation products of the precursors to be vertically transported to regions of very low temperature and to form aerosols there. Sulfate, black carbon, particulate organic matter and mineral dust in HAM2 have longer lifetimes than in HAM1 because of weaker in-cloud scavenging, which is in turn related to lower autoconversion efficiency in the newly introduced two-moment cloud microphysics scheme. Modification in the sea salt emission scheme causes a significant increase in the ratio (from 1.6 to 7.7) between accumulation mode and coarse mode emission fluxes of aerosol number concentration. This leads to a general increase in the number concentration of smaller particles over the oceans in HAM2, as reflected by the higher Ångström parameters. Evaluation against observation reveals that in terms of model performance, main improvements in HAM2 include a marked decrease of the systematic negative bias in the absorption aerosol optical depth, as well as smaller biases over the oceans in Ångström parameter and in the accumulation mode number concentration. The simulated geographical distribution of aerosol optical depth (AOD) is better correlated with the MODIS data, while the surface aerosol mass concentrations are very similar to those in the old version. The total aerosol water content in HAM2 is considerably closer to the multi-model average from Phase I of the AeroCom intercomparison project. Model deficiencies that require further efforts in the future include (i) positive biases in AOD over the ocean, (ii) negative biases in AOD and aerosol mass concentration in high-latitude regions, and (iii) negative biases in particle number concentration, especially that of the Aitken mode, in the lower troposphere in heavily polluted regions., Atmospheric Chemistry and Physics, 12 (19), ISSN:1680-7375, ISSN:1680-7367