Welcome to my website!
I'm a postdoctoral research fellow in the Department of Economics at the University of Bonn. I obtained my PhD from the LSE.
My research focuses on Monetary Economics and Finance, in particular on digital currencies and financial fragility.
I am a co-organiser of the Bonn/Mannheim Workshop on Digital Finance.
Click here to download my CV.
You can contact me via guennewi (at) gmail (dot) com and mguennewig (at) uni (minus) bonn (dot) de. Please use the latter for any teaching related queries.
previously titled "Money Talks: Information and Seignorage"
This paper analyses the consequences for monetary policy if the central bank competes with private money issued by firms. I present a benchmark with a monopoly firm who issues money and optimally implements deflationary monetary policy to boost product sales. As a result, the central bank loses its policy autonomy. I extend the benchmark to analyze the optimal policy of a currency consortium which issues money accepted by other firms. Inflationary pressures arise as the private currency becomes more widely used.
We empirically investigate the credibility of bank recapitalization reforms using a structural model similar to Merton (1974, 1977). Bank liabilities are contingent claims on its assets so that bank equity and debt can be interpreted as options on asset values. In the data, credit spreads on bank debt are valued as the product of ‘no-bailout’ probabilities and expected loss rates in the absence of a bailout. We calculate the latter using equity and balance sheet data. The no-bailout probability is estimated by regressing credit default swaps (CDS) spreads on the model-implied no-bailout loss rates. Before the Lehman bankruptcy, we find significantly higher market-perceived bailout probabilities for US banks, particularly G-SIBs, relative to non-financial firms. Since the Great Financial Crisis, bailout probabilities have clearly declined, and no longer differ statistically significantly.
In a model with asymmetric information on asset returns, banks issue demandable debt if the government's preferred resolution strategy takes the form of bail-ins. Creditors then respond to news on bank fundamentals and subsequent runs on loss-absorbing debt render bail-ins ineffective. Controlling the maturity structure of debt has two benefits. First, longer maturity debt disciplines markets ex-post while avoiding government bailouts. Second, ex-ante market discipline, measured by the average quality of projects, increases. The model provides an explanation why regulators impose minimum maturity requirements for bail-in debt and a motivation to treat short-term debt preferentially during intervention.
Work in progress
Platform Money: Competition for the Unit of Account
Lecturer, University of Bonn, Digital Finance (MSc)
I designed a course on blockchain economics and digital money. Students learn about the economic limits of blockchains and develop an understanding of currency competition in models of money as medium of exchange.
Lecturer, University of Bonn, Seminar "Wissenschaftliches Arbeiten" (BSc)
Seminar that introduces principles of research to undergraduate students.
Teaching Fellow, LSE, Ec424 Monetary Economics and Aggregate Fluctuations (MSc)
Full-year course covering money’s roles as a medium of exchange and unit of account, monetary policy in the presence of nominal rigidities, unconventional monetary policies, firm price setting behaviour, central bank communication, fiscal policy and financial crises.
Teaching Assistant, LSE, Ec210 Intermediate Macroeconomics (BSc)