Working Paper

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Working Paper: Firm Cyclicality and Financial Frictions

Firms’ sensitivities to business cycles differ by size and age. The differences are large: “young and small firms” are more cyclical than large firms, whereas “old and small” firms are closer to acyclical. A heterogeneous-firm model with heterogeneous returns to scale can replicate these findings, and implies changes in the potency of different stabilisation policies.


Working Paper: A Fiscal Theory of Persistent Inflation

We develop a model with partially unfunded debt to propose a fiscal theory of persistent inflation. After the pandemic, unfunded fiscal shocks sustain the recovery, but also cause a persistent increase in inflation. The model predicts the inflationary effects of the ARPA stimulus out of sample and using real-time data.


Working Paper: When credit expansions become troublesome: The story of investor sentiments

We decompose fluctuations in stock prices into fundamental and noise shocks and estimate their effects on credit. Both shocks lead to a credit expansion, but only a noise shock results in a reversal if the anticipated shock fails to realise. A novel debt overhang channel is important for the propagation of noise shocks.


Working Paper: Drivers of Real Interest Rates in A Two-country, General-equilibrium, OLG Model

We examine drivers of the equilibrium real interest rate in a two-country, general-equilibrium, OLG model. The model predicts that population growth, growth in technology, and increased longevity have reduced the equilibrium real interest rate by 2.25 percentage points from 1950 until today – and that these factors will pull it down by further 0.25 percentage points towards 2050. Differences in longevity may explain the build-up of the large Danish net foreign asset position.


Working Paper: The Danish Problem

Danmarks Nationalbank has been able to maintain the krone’s peg to the euro since the euro came into existence in 1999, and the krone’s peg to the Deutschmark and SDR for 17 years before that. This paper considers a series of hypotheses that may help to account for the exceptional nature of this case.


Working Paper: Walking the talk? Firm emissions and disclosure during the third phase of the EU emissions trading system

This study documents trends in emissions and emissions reporting for a sample of 141 large firms that were active within the EU Emissions Trading System during 2013–2019. Using text from annual reports, I document a rising share of information related to emissions. However, my measure of emissions talk is generally not predictive of past or future changes in firm emissions.


Working Paper: Opportunities and risks in the residential sector during a green transition: House prices, energy renovations and rising energy prices

Higher energy prices reduce sales prices of houses without district heating in some rural areas. Most energy renovations do not increase sales prices beyond their costs. Those that do have little impact on CO2 emissions, are cheap, and are typically only possible for houses located in and around towns and mid-sized cities and more generally in the geographically more central parts of Denmark.


Working Paper: What do negative policy rate economies have in common?

Five economies, Denmark, the euro area, Switzerland, Sweden and Japan, have conducted negative interest rate policies. In this paper, we document that these economies have high levels of public as well as private savings, not matched by high investments, relative to other high-income non-NIRP OECD economies.


Working Paper: Segmentation of the Housing Market with Internet Data: Evidence from Denmark

In this paper, we introduce a novel tool for housing market analysis developed on the basis of online listings data from the largest real estate listing site in Denmark. The tool uses a combination of machine learning techniques to provide a data-driven segmentation of the housing market into meaningful submarkets that differ from administrative classifications. We demonstrate how the tool can support monitoring and research of underlying housing market developments in Denmark.