External authors

Martin Kessler

Martin Kessler

External author

Martin Kessler has been a research analyst with the Peterson Institute since September 2011 and works with Senior Fellow Arvind Subramanian and Visiting Fellow C. Randall Henning. He previously worked as a research assistant for Jean Pisani-Ferry, director of the European think tank Bruegel, and as an economic attaché at the French Embassy in Berlin, reporting on German fiscal and European policies for the French Ministry of Finance. He holds a master's degree from the Paris School of Economics and wrote his thesis on innovation policies. He speaks French and English fluently, has a working knowledge of German, and a basic command of Hebrew.

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David C. Saha
Martin Kessler

Blogs review: OMT

What’s at stake: The ECB has announced “Outright Monetary Transactions” (OMT) on 6th September. Comprising of potentially unlimited purchases of government bonds, it is the largest ECB intervention so far. In the blogosphere, OMT is mainly evaluated as intended to prevent market panic from pushing otherwise solvent governments into bad equilibria, insolvency due to mounting interest payments. Criticism focuses on either conditionality requiring more austerity, stopping growth or on conditionality being not fully credible as OMT support cannot easily be withdrawn from non-compliant countries.

By: David C. Saha and Martin Kessler Topic: European Macroeconomics & Governance Date: October 15, 2014
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Jérémie Cohen-Setton
Martin Kessler

Blogs review: The safe asset shortage

What’s at stake: Safe debts – or what is often called information insensitive assets, as they do not suffer from the types of financial frictions that are characteristic to other financial assets – play a major role in facilitating transactions for institutional investors. And, as we have learned in the recent years, they also play a major role in triggering financial crises when they loose their safety status and turn into information sensitive assets. As central bankers start backpedalling on their commitments to increase the supply of safe assets and start worrying about the negative effects of the “search for yield”, there has been a renewed discussion in the blogosphere about the role of safe assets and whether they remain in short supply.

By: Jérémie Cohen-Setton and Martin Kessler Topic: Global Economics & Governance Date: October 14, 2013
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Jérémie Cohen-Setton
Martin Kessler

Blogs review: Can we all be more like Scandinavians?

What’s at stake: An interesting debate about the trade-off between innovation and redistribution has sparked over the (admittedly wonky) paper by Daron Acemoglu, James Robinson and Thierry Verdier in which the authors argue that the "cuddly" capitalism of Europe could not sustain high levels of growth in the absence of the "cutthroat" capitalism of America. Entrepreneurs in those ruthless economic models bear more risks – and thus move the technology frontier faster. While still in Working Paper format and written for an academic audience, the paper was picked up by several bloggers who criticized the premises, the methodology and the conclusions.

By: Jérémie Cohen-Setton and Martin Kessler Topic: European Macroeconomics & Governance Date: February 4, 2013
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Jérémie Cohen-Setton
Martin Kessler
David C. Saha

Blogs review: The Fiscal Cliff

What’s at stake: In an update to its budget and economic outlook, the Congressional Budget Office (CBO) reminded of the approaching “fiscal cliff” – a popular wonk-speak used to describe the significant automatic cuts in federal spending and tax increases scheduled to take place at year end under current laws. CBO estimates that the fiscal drag would be in the order of 4% and would cause a double-dip recession. But even before the issue of the actual economic drag such an impulse could create lies the question of how potential political scenarios could shape policy outcomes, especially ahead of the Presidential election.

By: Jérémie Cohen-Setton, Martin Kessler and David C. Saha Topic: Global Economics & Governance Date: November 9, 2012
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Jérémie Cohen-Setton
Shahin Vallée
Martin Kessler

Blogs review: What's finance for?

What’s at stake: Since the financial crisis, the role of finance has been put into question. Beyond the political process of re-regulation, it is useful to go back to the fundamental questions on the role of financial intermediation on growth, employment, risk sharing, etc. Does finance allocate capital efficiently, and allow better inter-temporal consumption and investments decisions or does it concentrate risks, create volatility, and increase inequality? Whether you look at its share of GDP or of profits, finance has undoubtedly become bigger over the last decade? Should something be done about it? The crisis and the Occupy Wall Street movement have renewed the urgency of these questions and the responses might drive the policy agenda over the next few years.

By: Jérémie Cohen-Setton, Shahin Vallée and Martin Kessler Topic: Finance & Financial Regulation Date: March 23, 2012
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Shahin Vallée
Jérémie Cohen-Setton
Emmanuel Letouzé
Martin Kessler

Can Europeans blog after all?

Last week, we wrote a post arguing that the European economic blogosphere was trailing by far its American counterpart. This is a revision of what we said.

By: Shahin Vallée, Jérémie Cohen-Setton, Emmanuel Letouzé and Martin Kessler Topic: European Macroeconomics & Governance Date: March 23, 2012
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Jérémie Cohen-Setton
Martin Kessler
Shahin Vallée

Europeans can’t blog

As Bruegel is launching its blog, and what we hope will become an important European forum for discussion on international economics, we came up with a few observations.

By: Jérémie Cohen-Setton, Martin Kessler and Shahin Vallée Date: March 15, 2012
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Jérémie Cohen-Setton
Martin Kessler

Bubbles and potential output

What’s at stake: What started as a speech on inflation targeting by the President of a regional Fed has turned into a fierce economic debate on the impact of the collapse of a bubble on potential GDP. While it is natural for the current debate to focus on this phase of the problem, a growing literature has also explored the impact of bubbles on potential GDP during the boom phase. We start by reviewing the provocative body of work that studies bubbles in the presence of financial frictions, which often come to the conclusion that bubbles can increase potential output by reducing the inefficiency induced by financial market frictions. We then review the current debate on the econ blogosphere following the infamous Bullard speech. Although the arguments are somewhat decoupled from the ones we outline in the first part and focus on more familiar ideas, it is interesting to see that a Fed regional President played by the rules of the econ blogosphere and wrote his own “geeky” post as a response to the criticisms he had received.

By: Jérémie Cohen-Setton and Martin Kessler Topic: Global Economics & Governance Date: February 17, 2012
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Essay / Lecture

Fiscal federalism: US history for architects of Europe's fiscal union

Fiscal federalism: US history for architects of Europe's fiscal union

Ever since first the blueprints for monetary union in Europe were drawn up, the United States, considered as a collection of individual states or regions, has served as a benchmark for assessing its feasibility and evaluating alternative policy options.

By: C. Randall Henning and Martin Kessler Topic: Global Economics & Governance Date: January 10, 2012
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Jérémie Cohen-Setton
Martin Kessler

Taxing the 1%

What’s at stake: While the movement of the “99 percent” is receding, some of the issues it raised continue to be highly discussed in academic and policy circles. In particular, a crucial public policy question is whether governments should tax high earners more. While in previous election cycles, the narrative on inequality and the crisis […]

By: Jérémie Cohen-Setton and Martin Kessler Topic: Finance & Financial Regulation Date: December 20, 2011
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Jérémie Cohen-Setton
Martin Kessler

Traditional vs. Modern Macro

What’s at stake: Larry Summers did not make a lot of friends earlier this year when he said that DSGE models played no role at all in the White House policy response to the crisis. That it was all IS-LM augmented by a liquidity trap. Since then, a series of debates has taken place on […]

By: Jérémie Cohen-Setton and Martin Kessler Topic: European Macroeconomics & Governance, Finance & Financial Regulation Date: October 20, 2011
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Jérémie Cohen-Setton
Martin Kessler

The uncertainty hypothesis

What’s at stake: Uncertainty is frequently blamed for the sorry state of the economy. In the US, the Speaker of the House John Boehner, for example, recently declared that regulatory, tax, and trade uncertainties are playing a hampering role on the recovery from the Lesser Depression by straining the incentives for companies to invest. After […]

By: Jérémie Cohen-Setton and Martin Kessler Topic: Global Economics & Governance Date: October 6, 2011
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