25 Years IWH

Professor Dr Tobias Knedlik

Professor Dr Tobias Knedlik
Current Position

since 4/14

Research Affiliate

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 2014

Professor for International Economics

Fulda University of Applied Sciences

Research Interests

  • European and international economic policy: in particular financial crises
  • International economics, exchange rate policy, international organizations
  • Economic growth an economic development

Tobias Knedlik is a Professor for International Economics at Fulda University of Applied Sciences, Germany. He studied economics at the University of Würzburg, Germany, and at the University of the Free State in Bloemfontein, South Africa.

He worked as Research Assistant at the Institute for World Economics and International Management at the University of Bremen (2002–2005) and received a doctoral degree in Economics in 2005. From 2005 to 2014, he worked as an economist at the Halle Institute for Economic Research. He served as visiting professor at the University of Erfurt, Germany; the University of the Free State, South Africa; and Addis Ababa University, Ethiopia.

On this website, publications resulting from cooperation with the IWH are listed. A complete list of publications is available on the author's website.

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Publications

The MCI as a Monetary Policy Guide in a Small, Open Emerging Market Economy

Philippe Burger Tobias Knedlik

in: The South African Journal of Economics , No. 72, 2004

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Central and Eastern European Countries in the Global Financial Crisis: A Typical Twin Crisis?

Diemo Dietrich Tobias Knedlik Axel Lindner

in: Post-Communist Economies , No. 4, 2011

Abstract

This paper shows that during the Great Recession, banking and currency crises occurred simultaneously in Central and Eastern Europe. Events, however, differed widely from what happened during the Asian crisis that usually serves as the model case for the concept of twin crises. We look at three elements that help explaining the nature of events in Central and Eastern Europe: the problem of currency mismatches, the relation between currency and banking crises, and the importance of multinational banks for financial stability. It is shown that theoretical considerations concerning internal capital markets of multinational banks help understand what happened on capital markets and in the financial sector of the region. We discuss opposing effects of multinational banking on financial stability and find that institutional differences are the key to understand differing effects of the global financial crisis. In particular, we argue that it matters if international activities are organized by subsidiaries or by cross-border financial services, how large the share of foreign currency-denominated credit is and whether the exchange rate is fixed or flexible. Based on these three criteria we give an explanation why the pattern of the crisis in the Baltic States differed markedly from that in Poland and the Czech Republic, the two largest countries of the region.

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Predicting Financial Crises: The (Statistical) Significance of the Signals Approach

Makram El-Shagi Tobias Knedlik Gregor von Schweinitz

in: Journal of International Money and Finance , No. 35, 2013

Abstract

The signals approach as an early-warning system has been fairly successful in detecting crises, but it has so far failed to gain popularity in the scientific community because it cannot distinguish between randomly achieved in-sample fit and true predictive power. To overcome this obstacle, we test the null hypothesis of no correlation between indicators and crisis probability in three applications of the signals approach to different crisis types. To that end, we propose bootstraps specifically tailored to the characteristics of the respective datasets. We find (1) that previous applications of the signals approach yield economically meaningful results; (2) that composite indicators aggregating information contained in individual indicators add value to the signals approach; and (3) that indicators which are found to be significant in-sample usually perform similarly well out-of-sample.

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Working Papers

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Predicting Financial Crises: The (Statistical) Significance of the Signals Approach

Makram El-Shagi Tobias Knedlik Gregor von Schweinitz

in: IWH Discussion Papers , No. 3, 2012

Abstract

The signals approach as an early warning system has been fairly successful in detecting crises, but it has so far failed to gain popularity in the scientific community because it does not distinguish between randomly achieved in-sample fit and true predictive power. To overcome this obstacle, we test the null hypothesis of no correlation between indicators and crisis probability in three applications of the signals approach to different crisis types. To that end, we propose bootstraps specifically tailored to the characteristics of the respective datasets. We find (1) that previous applications of the signals approach yield economically meaningful and statistically significant results and (2) that composite indicators aggregating information contained in individual indicators add value to the signals approach, even where most individual indicators are not statistically significant on their own.

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Macroeconomic Imbalances as Indicators for Debt Crises in Europe

Tobias Knedlik Gregor von Schweinitz

in: IWH Discussion Papers , No. 12, 2011

Abstract

European authorities and scholars published proposals on which indicators of macroeconomic imbalances might be used to uncover risks for the sustainability of public debt in the European Union. We test the ability of four proposed sets of indicators to send early-warnings of debt crises using a signals approach for the study of indicators and the construction of composite indicators. We find that a broad composite indicator has the highest predictive power. This fact still holds true if equal weights are used for the construction of the composite indicator in order to reflect the uncertainty about the origin of future crises.

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The European Commission’s Scoreboard of Macroeconomic Imbalances – The Impact of Preferences on an Early Warning System

Tobias Knedlik

in: IWH Discussion Papers , No. 10, 2012

Abstract

The European Commission’s Scoreboard of Macroeconomic Imbalances is a rare case of a publicly released early warning system (EWS). That allows for analyzing the preferences of the involved politicians with regard to the two potential errors of an EWS – missing a crisis and issuing a false alarm. This is done for the first time for EWS in general by using a standard signals approach including a preference-based optimization approach to set thresholds. It is shown that in general, the thresholds of the scoreboard are set low (resulting in more alarm signals) as compared to a neutral stand.

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