Timo Reinelt

Economist Graduate Programme Participant
European Central Bank


I am an Economist Graduate Programme Participant at the ECB. My research is in macroeconomics and monetary economics, with a focus on firm dynamics.

I received my Ph.D. in Economics from the University of Mannheim in 2022. I also hold a Bachelor in Economics (B.Sc.) from the University of Tübingen and a Master in Economics (M.Phil.) from the University of Oxford.

I will be joining the San Francisco Fed research department this summer!

Research Papers

Tax Thy Neighbor: The Pass-through of Local Corporate Taxes into Consumer Prices across German Regions (December 2023), with Luca Dedola and Chiara Osbat
Consumer prices respond strongly to changes in local corporate tax rates on producers. The pass-through of such shocks to producer markups is higher in sales regions and retailers where firms and retailers have higher market shares. This is consistent with weak forms of strategic complementarities. [ECB Research Bulletin] [ECB Working Paper]
[Supersedes a previous draft titled "Tax thy neighbour: Corporate tax pass-through into downstream consumer prices in a monetary union"]

Monetary Policy, Markup Dispersion, and Aggregate TFP (May 2022), with Matthias Meier
Monetary policy shocks increase markup dispersion and lower aggregate TFP. This "misallocation channel of monetary policy" is generated by heterogeneity in price rigidity across firms. [Ungated] [ECB Working Paper]
Review of Economics and Statistics, forthcoming

Corporate Debt Maturity Matters For Monetary Policy (April 2022), with Joachim Jungherr, Matthias Meier, and Immo Schott
Firms react more strongly to monetary shocks if a larger fraction of their debt is maturing at the time of the shock. A heterogeneous firm New Keynesian model with financial frictions and endogenous debt maturity shows that a debt overhang and a roll-over risk channel explain this finding. Heterogeneous debt maturity implies larger aggregate effects of monetary policy.
Revise and Resubmit, Review of Economic Studies

Subjective Housing Price Expectations, Falling Natural Rates, and the Optimal Inflation Target (July 2023), with Klaus Adam and Oliver Pfäuti
Housing price expectations deviate from rational expectations along a number of dimensions. These deviations and the behavior of housing prices can be jointly explained by capital gain extrapolation. In a sticky price model with a lower bound, such capital gain extrapolation implies that lower natural rates give rise to a significantly higher optimal inflation target. [CEPR Working Paper]
[Supersedes a previous draft titled "Falling Natural Rates, Rising Housing Volatility and the Optimal Inflation Target"]
Reject and Resubmit, Journal of Monetary Economics

Markups and Inflation Cyclicality in the Euro Area (October 2021), with Omiros Kouvavas, Chiara Osbat, and Isabel Vansteenkiste
Market power matters for price setting and inflation dynamics: Inflation rates in sectors with higher markups are less responsive to business cycle shocks and monetary policy. [ECB Working Paper]

Selected Work in Progress

SAFE to Update Inflation Expectations? New Evidence on Euro Area Firms, with Ursel Baumann, Annalisa Ferrando, Dimitris Georgarakos, and Yuriy Gorodnichenko

Measuring Market Power: Demand vs. Supply, with Luca Dedola, Lukas Henkel, Colin J. Hottman, and Ryan Kim

The Precautionary Inflation Surge? Inflation Uncertainty and Price Setting, with Saten Kumar and Matthias Meier

All material found on this website represents my own views. It does not necessarily represent the views of the ECB or the Eurosystem.