Maximilian Freier
Economics
- Current Position
-
Lead Economist
- Fields of interest
-
Macroeconomics and Monetary Economics,Public Economics,Other Special Topics
- Other current responsibilities
- 2024
Artificial Intelligence (AI) Coordinator for the ECB's Directorate General Economics
- 2023
Chairperson of the ESCB Network on Microsimulation Modelling
- 2023
Secretary of the ECB's Monetary Policy Committee
- Education
- 2007-2010
Doctor of Philosophy (PhD) at the London School of Economics and Political Science
- 2009
Visiting Researcher at Columbia University's Graduate School of Arts and Sciences
- 2005-2006
Master of Science (MSc) in Political Economy at the London School of Economics and Political Science
- 1999-2005
Master's degree in Economics (Diplomvolkswirt) at Ludwig Maximilian University of Munich
- 1999-2004
Master of Arts (M.A.) in Political Science at Ludwig Maximilian University of Munich
- 2003
Visiting student at University of British Columbia
- Professional experience
- 2023-
Lead Economist in the ECB's Directorate General Economics
- 2022-2023
Principal Economist in the ECB's Fiscal Policies Division
- 2019-2022
Senior Economist in the ECB's Fiscal Policies Division
- 2012-2019
Economist in the ECB's Fiscal Policies Division
- 2010-2012
Economist in the ECB's Monetary Policy Strategy Division
- 2006-2007
Economist in the ECB's European and International Fora Division
- Awards
- 2011
European Business Circle Research Award, Brussels
- 2009
Global Public Policy Network Scholarship
- 2005
Wings of Excellence Award (First Prize), St. Gallen
- 2005
Research scholarship by the German Academic Exchange Service (DAAD)
- 2000
Studentship by the Förderverein Kurt Fordan für herausragende Begabungen e.V., Munich
- Teaching experience
- 2008-2009
“Public Choice and Politics” at the London School of Economics and Political Science
- 23 November 2023
- THE ECB BLOGDetails
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
H31 : Public Economics→Fiscal Policies and Behavior of Economic Agents→Household
H53 : Public Economics→National Government Expenditures and Related Policies→Government Expenditures and Welfare Programs
- 16 October 2023
- OCCASIONAL PAPER SERIES - No. 330Details
- Abstract
- This paper analyses the distributional impact of high consumer inflation in the euro area and government measures to compensate households in 2022. The study uses the tax-benefit microsimulation model for the European Union (EUROMOD) with microdata as the input – EU statistics on income and living conditions (EU-SILC) and household budget surveys (HBS) – to quantify the distributional impact of inflation, income support measures and measures aimed at containing prices. The analysis confirms that purchasing power and welfare were more severely affected by the 2022 inflation surge in lower-income households than in higher-income households. Fiscal measures compensated households for about a third of their welfare loss, though with significant differences between countries. At the same time, fiscal measures closed around 60% of the inequality gap between lower and higher-income households. Most fiscal measures were not particularly well targeted at low-income households, resulting in a higher than necessary fiscal burden to cushion the distributional impact of the inflationary shock.
- JEL Code
- D12 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Empirical Analysis
D31 : Microeconomics→Distribution→Personal Income, Wealth, and Their Distributions
D60 : Microeconomics→Welfare Economics→General
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
H20 : Public Economics→Taxation, Subsidies, and Revenue→General
I30 : Health, Education, and Welfare→Welfare, Well-Being, and Poverty→General
- 19 May 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 3, 2023Details
- Abstract
- The euro area’s population is projected to continue ageing and to shrink significantly over the coming generations. The coronavirus (COVID-19) pandemic and the influx of migrants are leaving a mark on the short and medium-term demographic outlook for the euro area compared with the 2019 population projections. This box shows that the resulting demographic outlook is expected to have some positive impact on the growth outlook and to ease the cost-of-ageing pressures on public finances. Overall, however, demographic trends continue to pose significant challenges to the euro area economy, and these challenges should be addressed in a timely manner.
- JEL Code
- R23 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Household Analysis→Regional Migration, Regional Labor Markets, Population, Neighborhood Characteristics
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
H50 : Public Economics→National Government Expenditures and Related Policies→General
- 27 March 2023
- OCCASIONAL PAPER SERIES - No. 311Details
- Abstract
- Over the past decade, geopolitical developments – and the policy responses to these by major economies around the world – have challenged economic openness and the process of globalisation, with implications for the economic environment in which central banks operate. The return of war to Europe and the energy shock triggered by the Russian invasion of Ukraine in 2022 are the latest in a series of episodes that have led the European Union (EU) to develop its Open Strategic Autonomy (OSA) agenda. This Report is a broad attempt to take stock of these developments from a central banking perspective. It analyses the EU’s economic interdependencies and their implications for trade and finance, with a focus on strategically important dimensions such as energy, critical raw materials, food, foreign direct investment and financial market infrastructures. Against this background, the Report discusses relevant aspects of the EU’s OSA policy agenda which extends to trade, industrial and state aid measures, as well as EU initiatives to strengthen and protect the internal market and further develop Economic and Monetary Union (EMU). The paper highlights some of the policy choices and trade-offs that emerge in this context and possible implications for the ECB’s monetary policy and other policies.
- JEL Code
- F0 : International Economics→General
F10 : International Economics→Trade→General
F30 : International Economics→International Finance→General
F4 : International Economics→Macroeconomic Aspects of International Trade and Finance
F5 : International Economics→International Relations, National Security, and International Political Economy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
L5 : Industrial Organization→Regulation and Industrial Policy
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
- 15 February 2023
- THE ECB BLOGDetails
- JEL Code
- H54 : Public Economics→National Government Expenditures and Related Policies→Infrastructures, Other Public Investment and Capital Stock
- 13 February 2023
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 2, 2023Details
- Abstract
- This article assesses the relation between fiscal policy and inflation, with a focus on the euro area and the period 2022-25 (corresponding to the horizon of the December 2022 Eurosystem staff macroeconomic projections for the euro area). Overall, the article concludes that, even without the discretionary policy response to the high energy prices and inflation (assessed at close to 2% of GDP over the 2022-23 period), the euro area budget balance could be negatively affected by the current high inflation beyond the short term. This is primarily explained by the nature of the inflation shock, which has a substantial external, energy-driven component, and its large size. Such factors lead to more limited gains on the revenue side of the budget, which in turn can easily be outweighed in the following years by extra spending pressures. In terms of the euro area debt-to-GDP ratio, the analysis shows that a negative impact on economic activity from an adverse supply shock, given the monetary policy reaction, may outweigh the positive initial impact of higher inflation through the denominator effect. The discretionary fiscal policy measures that have so far been adopted to shield the economy from the impact of high inflation in turn lower the inflationary pressures over the 2022-23 period, with a broad estimated reversal of the effect afterwards. The degree to which these fiscal measures will influence price dynamics is highly uncertain.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E37 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Forecasting and Simulation: Models and Applications
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
- 2 August 2022
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2022Details
- Abstract
- This box provides a quantitative analysis of the euro area fiscal support measures introduced in response to the war in Ukraine, including measures to compensate for high energy prices, and provides estimates for the impact of this support on growth and inflation over the period 2022-24.
- JEL Code
- E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
J3 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs
H55 : Public Economics→National Government Expenditures and Related Policies→Social Security and Public Pensions
- 27 April 2022
- OCCASIONAL PAPER SERIES - No. 291Details
- Abstract
- This paper assesses the potential economic impact of Next Generation EU (NGEU), focusing on the euro area. Its findings suggest that the envisaged national investment and reform plans present a coherent package to support both recovery from the pandemic-induced crisis and longer-term modernisation of the euro area economy through their digital and green transitions. NGEU, however, can only unfold its full potential if all plans are implemented in a timely and effective way. We estimate the impact of the national plans on output, inflation and public debt using ECB staff economic models under the assumption of successful implementation. Specifically, NGEU is expected to take effect through three channels: structural reform, fiscal stimulus and risk premium. Overall, NGEU may increase gross domestic product (GDP) in the euro area by up to 1.5% by 2026, with the impact expected to be significantly larger in the main beneficiary countries. In Italy and Spain, two of the main beneficiaries, the public debt-to-GDP ratio may be more than 10 percentage points lower by 2031. At the same time, all euro area countries are expected to benefit from NGEU through positive spillovers, greater economic resilience and convergence across countries. Finally, the effect of NGEU on euro area inflation over the medium term is deemed to be contained to the extent that the inflationary effect of additional public expenditure is offset, at least to some degree, by the disinflationary effect of greater productive capacity resulting from the planned structural reform and investment measures.
- JEL Code
- C54 : Mathematical and Quantitative Methods→Econometric Modeling→Quantitative Policy Modeling
E02 : Macroeconomics and Monetary Economics→General→Institutions and the Macroeconomy
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
H87 : Public Economics→Miscellaneous Issues→International Fiscal Issues, International Public Goods
O52 : Economic Development, Technological Change, and Growth→Economywide Country Studies→Europe
- 15 February 2022
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 1, 2022Details
- Abstract
- The article takes stock of Next Generation EU (NGEU) from a euro area perspective. NGEU is a temporary crisis instrument that, if implemented successfully, is expected to significantly improve Europe’s economic prospects. In the short term, it should support the recovery of the EU economy. In the medium term, NGEU should help to modernise the EU economies, with positive effects on their growth potential, resilience and convergence. The article provides a synthesis of the fiscal measures and structural reforms embedded in the national recovery and resilience plans of euro area countries. It also looks at the economic impact of the planned investments. Finally, the article examines the novel governance approach that can sustain a successful implementation of NGEU.
- JEL Code
- E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
F47 : International Economics→Macroeconomic Aspects of International Trade and Finance→Forecasting and Simulation: Models and Applications
- 11 January 2022
- OCCASIONAL PAPER SERIES - No. 288Details
- Abstract
- A key element of the European reform agenda is to simplify the EU fiscal governance framework by moving towards a single debt anchor and a single operational indicator as the basis for formulating fiscal targets and assessing compliance. This paper puts forward an in-depth analysis of two alternative fiscal performance indicators currently used in the EU fiscal framework: the change in the structural balance and the expenditure benchmark. Comparing these two indicators allows us to identify options for the design of a fiscal performance measure – such as assumptions on cyclical adjustment and the inclusion of fiscal variables – and assess their policy impact. Our paper finds that the expenditure benchmark used in the EU fiscal governance framework has advantages over the change in the structural balance. However, it still has scope for improvement. The paper also shows that taking account of interest payments in the expenditure benchmark would make fiscal policy more supportive of the monetary policy stance.
- JEL Code
- C54 : Mathematical and Quantitative Methods→Econometric Modeling→Quantitative Policy Modeling
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E65 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Studies of Particular Policy Episodes
F54 : International Economics→International Relations, National Security, and International Political Economy→Colonialism, Imperialism, Postcolonialism
F47 : International Economics→Macroeconomic Aspects of International Trade and Finance→Forecasting and Simulation: Models and Applications
- 21 September 2021
- OCCASIONAL PAPER SERIES - No. 273Details
- Abstract
- The last review of the ECB’s monetary policy strategy in 2003 followed a period of predominantly upside risks to price stability. Experience following the 2008 financial crisis has focused renewed attention on the question of how monetary and fiscal policy should best interact, in particular in an environment of structurally low interest rates and persistent downside risks to price stability. This debate has been further intensified by the economic impact of the coronavirus (COVID-19) pandemic. In the euro area, the unique architecture of a monetary union consisting of sovereign Member States, with cross-country heterogeneities and weaknesses in its overall construction, poses important challenges. Against this background, this report revisits monetary-fiscal policy interactions in the euro area from a monetary policy perspective and with a focus on the ramifications for price stability and maintaining central bank independence and credibility. The report consists of three parts. The first chapter presents a conceptual framework for thinking about monetary-fiscal policy interactions, thereby setting the stage for a discussion of specifically euro area aspects and challenges in subsequent parts of the report. In particular, it reviews the main ingredients of the pre-global financial crisis consensus on monetary-fiscal policy interactions and addresses significant new insights and refinements which have gained prominence since 2003. In doing so, the chapter distinguishes between general conceptual aspects – i.e. those aspects that pertain to an environment characterised by a single central bank and a single fiscal authority and those aspects that pertain to an environment characterised by a single central bank and many fiscal authorities (a multi-country monetary union). ...
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
- 23 September 2020
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 6, 2020Details
- Abstract
- Fiscal policy is playing a key role in stemming the economic fallout from the coronavirus (COVID-19) pandemic. In addition to the discretionary fiscal policy measures employed by governments, automatic fiscal stabilisers play an important role in cushioning the economic downturn. This article shows that automatic fiscal stabilisers are generally sizeable in the euro area, but vary significantly across Member States. However, their effectiveness may be more limited at the current juncture, given the nature of the COVID-19 crisis and the high uncertainty surrounding its effects. This provides a rationale for a stronger role of discretionary fiscal policy at national and European level. Over the medium term, fiscal policies could increasingly make use of quasi-automatic fiscal instruments that provide additional timely, targeted and temporary macroeconomic stabilisation for the euro area. Careful consideration should be given to the design of such instruments over the business cycle, their economic efficiency, and to the need for building fiscal buffers in good times.
- JEL Code
- H12 : Public Economics→Structure and Scope of Government→Crisis Management
H20 : Public Economics→Taxation, Subsidies, and Revenue→General
E63 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Comparative or Joint Analysis of Fiscal and Monetary Policy, Stabilization, Treasury Policy
- 4 May 2020
- WORKING PAPER SERIES - No. 2399Details
- Abstract
- We consider the effects of quantitative easing on liquidity and prices of bonds in a search-and matching model. The model explicitly distinguishes between demand and supply effects of central bank asset purchases. Both are shown to lead to a decline in yields, while they have opposite effects on market liquidity. This results in a price-liquidity trade-off. Initially, liquidity improves in reaction to central bank demand. As the central bank buys and holds bonds, supply becomes scarcer and other buyers are crowded out. As a result, liquidity can fall below initial levels. The magnitude of the effects depend on the presence of preferred habitat investors. In markets with a higher share of these investors, bonds are scarcer and central bank asset purchases lower yields more. With a lower share of preferred habitat investors and a relatively illiquid market, central bank demand has a stronger positive effect on liquidity. We are the first to construct an index from bond holding data to measure the prevalence of preferred habitat investors in each euro area country. Subsequently, we calibrate the model to the euro area and show how yields and liquidity are affected by the European Central Banks asset purchase programme.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates - Network
- Research Task Force (RTF)
- 8 April 2020
- OCCASIONAL PAPER SERIES - No. 239Details
- Abstract
- After the financial and economic crisis in Europe, a broad consensus has emerged that a stronger fiscal dimension may be needed to complete the architecture of Economic and Monetary Union (EMU). This paper analyses the performance of interregional transfers in existing fiscal-federal systems, notably in Austria, Belgium, Germany, Spain and the United States, and aims to draw lessons for the design of a euro area fiscal instrument. The empirical risk-sharing analysis in this paper suggests that effective cross-regional stabilisation of asymmetric shocks tends to work via direct cash transfers to households, such as unemployment benefits, which are financed out of cyclical central government taxes and social security contributions. This would suggest that a euro area budgetary instrument for stabilisation should be designed as a tool that enhances the automatic stabilisation capacity in the single currency area. At the same time, it seems important that a prospective central stabilisation instrument for the euro area would be integrated in an overall fiscal policy framework that ensures proper incentives for national policymakers.
- JEL Code
- E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
H11 : Public Economics→Structure and Scope of Government→Structure, Scope, and Performance of Government
H77 : Public Economics→State and Local Government, Intergovernmental Relations→Intergovernmental Relations, Federalism, Secession
- 2024
- Review of Income and Wealth
- 2024
- SUERF Policy Brief, 822
- 2024
- SocArXiv
- 2023
- VOXEU.org
- 2022
- SUERF Policy Note, Issue No 267
- 2022
- LSE ‘Europe in Question’ Discussion Paper Series
- 2012
- Europe and National Economic Transformation: The EU After the Lisbon DecadeThe transformation of public employment services during the Lisbon decade
- 2009
- European Perspectives on Cultural and Media StudiesBoring Europe: Why the EU Needs More Political Drama
- 2008
- VDM VerlagAmerika, Europa und die Dritte Welt: Eine Untersuchung der Ziele und Strategien europäischer und US-amerikanischer Entwicklungspolitik nach Ende des Ost-West-Konflikts