Professor Dr Alexander Kriwoluzky

Professor Dr Alexander Kriwoluzky
Current Position

since 4/18

Head of the Department of Macroeconomics

DIW Berlin

since 12/16

Research Fellow Department of Macroeconomics

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

since 11/14

Professor of Monetary Macroeconomics

Martin Luther University Halle-Wittenberg

Research Interests

  • applied macroeconometrics
  • fiscal and monetary policy

Alexander Kriwoluzky joined the Department of Macroeconomics as a Research Fellow in December 2016. His research focuses on applied macroeconometrics as well as fiscal and monetary policy.

Alexander Kriwoluzky is Head of the Department of Macroeconomics at DIW since April 2018 and Professor of Monetary Macroeconomics at Martin Luther University Halle-Wittenberg since November 2014. Prior to that, he taught at University of Bonn and Tinbergen Institute Amsterdam.

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Professor Dr Alexander Kriwoluzky
Professor Dr Alexander Kriwoluzky
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Monetary-fiscal Policy Interaction and Fiscal Inflation: A Tale of Three Countries

Martin Kliem Alexander Kriwoluzky Samad Sarferaz

in: European Economic Review, 2016


We study the impact of the interaction between fiscal and monetary policy on the low-frequency relationship between the fiscal stance and inflation using cross-country data from 1965 to 1999. In a first step, we contrast the monetary–fiscal narrative for Germany, the U.S., and Italy with evidence obtained from simple regression models and a time-varying VAR. We find that the low-frequency relationship between the fiscal stance and inflation is low during periods of an independent central bank and responsible fiscal policy and more pronounced in times of non-responsible fiscal policy and accommodative monetary authorities. In a second step, we use an estimated DSGE model to interpret the low-frequency measure structurally and to illustrate the mechanisms through which fiscal actions affect inflation in the long run. The findings from the DSGE model suggest that switches in the monetary–fiscal policy interaction and accompanying variations in the propagation of structural shocks can well account for changes in the low-frequency relationship between the fiscal stance and inflation.

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On the Low-frequency Relationship Between Public Deficits and Inflation

Martin Kliem Alexander Kriwoluzky Samad Sarferaz

in: Journal of Applied Econometrics, No. 3, 2016


We estimate the low-frequency relationship between fiscal deficits and inflation and pay special attention to its potential time variation by estimating a time-varying vector autoregression model for US data from 1900 to 2011. We find the strongest relationship neither in times of crisis nor in times of high public deficits, but from the mid 1960s up to 1980. Employing a structural decomposition of the low-frequency relationship and further narrative evidence, we interpret our results such that the low-frequency relationship between fiscal deficits and inflation is strongly related to the conduct of monetary policy and its interaction with fiscal policy after World War II.

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Nested Models and Model Uncertainty

Alexander Kriwoluzky Christian A. Stoltenberg

in: Scandinavian Journal of Economics, No. 2, 2016


Uncertainty about the appropriate choice among nested models is a concern for optimal policy when policy prescriptions from those models differ. The standard procedure is to specify a prior over the parameter space, ignoring the special status of submodels (e.g., those resulting from zero restrictions). Following Sims (2008, Journal of Economic Dynamics and Control 32, 2460–2475), we treat nested submodels as probability models, and we formalize a procedure that ensures that submodels are not discarded too easily and do matter for optimal policy. For the United States, we find that optimal policy based on our procedure leads to substantial welfare gains compared to the standard procedure.

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Working Papers


Same, but Different: Testing Monetary Policy Shock Measures

Alexander Kriwoluzky Stephanie Ettmeier

in: IWH Discussion Papers, No. 9, 2017


In this study, we test whether three popular measures for monetary policy, that is, Romer and Romer (2004), Barakchian and Crowe (2013), and Gertler and Karadi (2015), constitute suitable proxy variables for monetary policy shocks. To this end, we employ different test statistics used in the literature to detect weak proxy variables. We find that the measure derived by Gertler and Karadi (2015) is the most suitable in this regard.

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Exit Expectations and Debt Crises in Currency Unions

Alexander Kriwoluzky G. J. Müller M. Wolf

in: IWH Discussion Papers, No. 18, 2015


Membership in a currency union is not irreversible. Exit expectations may emerge during sovereign debt crises, because exit allows countries to reduce their liabilities through a currency redenomination. As market participants anticipate this possibility, sovereign debt crises intensify. We establish this formally within a small open economy model of changing policy regimes. The model permits explosive dynamics of debt and sovereign yields inside currency unions and allows us to distinguish between exit expectations and those of an outright default. By estimating the model on Greek data, we quantify the contribution of exit expectations to the crisis dynamics during 2009 to 2012.

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