Paul M. Konietschke

Paul M. Konietschke

PhD Candidate in Economics at Goethe University Frankfurt, RA at Technical University Darmstadt, Research consultant at the ECB.

Research

Publications

Macroeconomic Reversal Rate in a Low Interest Rate Environment (with Jan Willem van den End, Anna Samarina, and Irina Stanga)
International Journal of Central Banking (2025) published version · ECB WP 2620

Abstract
This paper investigates how the monetary policy transmis sion changes once the economy is in a low interest rate environment. We estimate a nonlinear model for the euro area and a panel of 10 euro-area countries over the period 1999–2019 and allow for the effects of monetary policy shocks to be state-dependent. Using smooth transition local projections (STLPs), we examine the impulse responses of investment, savings, consumption, and the output gap to an expansionary monetary policy shock under normal and low interest rate regimes. We find evidence for changes in the monetary policy transmission across the two interest rate regimes. Expansionary monetary policy shocks are either less effective in stimulating aggregate demand or their impact reverses the sign in a low interest rate regime.

Selected Presentations: Fifth Annual Workshop of the ESCB Research Cluster on Monetary Economics 2021, Research seminars at the Central Bank of Ireland 2021*, ECB November 2020, and De Nederlandsche Bank 2020*

Working Papers

A Quantile Probability Model for Sectoral Corporate Defaults in Europe (with Julian Metzler and Aurea Ponte Marques)
ECB Working Paper No 3207 (2026)

Abstract
Conventional credit risk models understate tail risk by centering on mean default probabilities and neglecting distributional and sectoral heterogeneity. We propose a Quantile Probability of Default (QPD) framework based on unconditional quantile regressions estimated on flow default rates from five million non‑financial firms across nine countries, conditioned on macro‑ and sectoral scenario covariates standard in stress testing. The tail exhibits three‑ to five‑fold stronger sensitivitiy than at the median, revealing nonlinearities and asymmetric sectoral propagation of credit risk. We validate the performance of our model across crisis periods and benchmark models to confirm the framework’s robustness and prudential efficiency. Under the ECB’s 2025 increasing geopolitical and trade tensions scenario, the QPD identifies higher tail vulnerabilities in construction, trade, hospitality, and real estate. The framework embeds distributional estimation into stress testing, advancing scenario‑based assessment of sectoral credit risk for policy and prudential applications.

Selected Presentations: ECB Workshop on Corporate Economics, ECB Financial Stability Committee Working Group on Stress Testing*, IMF Middle East Center for Economics and Finance Workshop (scheduled)

Tax Multipliers Across the Business Cycle (with Dennis Bonam)
NEW Revised revision (2026) DNB WP 699 (old version)

Abstract
We estimate the impact of tax shocks on output across different stages of the business cycle. We do so for a panel of advanced economies using a harmonized dataset of narrative-identified exogenous tax changes and a smooth transition local projection model. The output response to an exogenous tax change is significant, but only during economic expansions—in recessions, the tax multiplier is insignificant, both in the short- and medium term. A unique panel of disaggregated tax changes reveals that the state dependence of the tax multiplier is predominantly driven by income and indirect taxes. Our results exhibit no asymmetry in the direction of the tax change and are robust to a number of alternative model specifications and definitions of the business cycle. We rationalize our empirical findings in a model with an occasionally binding borrowing constraint that generates a state-dependent response of hours worked to tax changes, with different tax types producing output patterns consistent with the data.

Selected Presentations: 6th Warsaw MMF ICEA conference, 25th IWH Halle Macroeconometric Workshop, 3rd Baltic Central Banks Invited Lecture Series, 4th Innsbruck Workshop in Macroeconomics, 41st European Economic Association Congress, Verein fuer Sozialpolitik Jahrestagung 2026, Fall Midwest Macro Meetings 2026 (scheduled), ASSA/AEA Annual Conference 2027 (scheduled)

Work In Progress

Credit Frictions and the Investment Effects of Corporate Taxation (JMP)

Abstract
I study how profit taxes affect investment and credit supply across non-financial corporations. An increase in the corporate tax rate cumulatively reduces tangible investment within three years. The response is concentrated among financially constrained firms, while less constrained firms react only weakly. Loan-level evidence highlights a risk-pricing channel: tax hikes raise borrowing costs, with effects that are further amplified for constrained borrowers. A reduced-form general-equilibrium analysis shows that, under tight aggregate credit conditions, a tax increase is up to three times more harmful to investment than under loose conditions. The findings suggest that tax policy interacts with both firm-level financial frictions and aggregate credit conditions, amplifying investment dynamics.

Selected Presentations: 2nd Frankfurt Macro-Finance Summer School, Kansas City Fed Seminar, Chicago Booth Finance Brownbag, Bundesbank Workshop on Monetary and Fiscal Interactions, German Finance Ministry NEST Conference, ASSA/AEA Annual Conference 2027 (scheduled), IMF Seminar Series (scheduled)

Local Taxes, Local Banks (with Felix Dornseifer)
Abstract coming soon.

* Indicate presentations given by co-authors.