Research Papers

Offshore real estate investment. Economic incentives, secrecy motives, and ultimate ownership
with Daniel Weishaar, conference draft available on request


Using administrative land register data on the universe of foreign commercial real estate holdings in England and Wales, we exploit tax policy changes and transparency shocks to identify reactions of foreign owners of real estate. Results show that both tax incentives and secrecy motives drive foreign investment in real estate markets. Further, we link these data to corporate records leaked from secrecy jurisdictions where corporate structures usually conceal the ultimate owner of these investments. This allows us to follow foreign real estate holdings through to the ultimate beneficiaries. A significant share of the linked foreign corporate real estate investment can be traced back to UK citizens and therefore constitutes round-tripping. These findings have important implications for both real estate policy in target countries and regulation attempts of offshore financial centers.

The elusive banker. Using hurricanes to uncover (non-) activity in offshore financial centers
2019 Job Market Paper


A number of small islands in the Caribbean and the Pacific are accumulating billions of dollars in international capital. Are these positions attracted by specialized human capital and innovative financial services, as such Offshore Financial Centers (OFCs) claim? Or are they the result of regulatory arbitrage as some economists assume, pointing to financial stability and effective taxation concerns? Based on several novel data sources, this study exploits the natural experiment of re-occurring hurricanes to test for reactions in financial service activity of OFCs. I find that local conditions, captured by geospatial satellite data on nightlight intensity, deteriorate by 30-50% for 7 months on average. However, in OFCs neither the interbank market nor international investors react, while non-OFC islands do show strong negative reactions. Only local company incorporations decline in OFCs after hurricanes hit and this activity can be linked to financial hubs such as London. These results suggest that the high-powered financial service activities leading to the large international capital positions of OFCs take place elsewhere and that OFCs do not create value by providing human capital or financial services locally.


ASSA Annual Meeting: San Diego
Winter School on Inequality and Social Welfare Theory: Alba di Canazei

MaTax - Sixth Annual Conference, ZEW Mannheim
job talks

Econometric Society - European Winter Meeting, Naples
Invited expert: Joint Research Center of the European Commission, Seville
PhD Workshop: Max Planck Institute for Tax Law and Public Finance, Munich
Centre for Business Taxation Doctoral Meeting: Sa"id Business School, University of Oxford
17th Workshop on Public Finance: WZB, Berlin
Brown Bag Seminar Macroeconomics: Humboldt University Berlin
BERA Workshop on Applied Economics: Hertie School of Governance
VfS conference (German Economic Association): University of Freiburg
CEBI Seminar: University of Copenhagen
Cluster Seminar on Public Finance: DIW Berlin\

Tax evasion in new disguise? Examining tax havens’ international bank deposits
with Lukas Menkhoff
Journal of Public Economics, 2019, link here.
earlier version: DIW discussion paper No. 1711
an earlier version circulated under the name ‘Dirty money coming home: Capital flows into and out of tax havens’


Bank deposits in tax havens potentially hide illegal tax evasion. The October 2016 release of bilateral locational banking statistics permits us to illuminate three open issues in this respect. We find that the intended effect of additional information-exchange-on-request treaties vanishes since about 2010. This also holds for bank deposits from tax havens in non-havens. In contrast, new treaties based on the automatic exchange of information show bite. This suggests that tax evasion changes its disguise: it adapts to established information exchange treaties while tax evaders seem (partly) surprised by, and thus react to, new treaty forms.


Public Economics Seminar: Ludwig-Maximilians-University, Munich

Invited expert: Joint Research Center of the European Commission, Seville
EEA conference: University of Cologne
Invited session IIPF Annual conference: University of Tampere
GIGA Seminar in Socio-Economics: German Institute of Global and Area Studies, Hamburg
Economics Colloquium: University of Hannover

VfS conference (German Economic Association): University of Vienna
5th Shadow Economy conference: University of Warsaw
DIW graduate center workshop
15th INFINITI conference: University of Valencia

DIW graduate center workshop, Potsdam

Media: live interview on DW English; Handelsblatt (Germany); Der Standard (Austria); Neue Zuercher Zeitung (Switzerland)

The needle in the haystack: What drives labor and product market reforms in advanced countries?
with Romain Duval and Davide Furceri
forthcoming at the Journal of Applied Econometrics
earlier version: IMF working paper No. 101


The political economy literature has put forward a multitude of hypotheses regarding the drivers of structural reforms, but few, if any, empirically robust findings have emerged thus far. To make progress, we draw a parallel with model uncertainty in the growth literature and provide a new version of the Bayesian averaging of maximum likelihood estimates (BAMLE) technique tailored to binary logit models. Relying on a new database of major past labor and product market reforms in advanced countries, we test a large set of variables for robust correlation with reform in each area. We find widespread support for the crisis-induces-reform hypothesis. Outside pressure increases the likelihood of reform in certain areas: reforms are more likely when other countries also undertake them and when there is formal pressure to implement them. Other robust correlates are more specific to certain areas — for example, international pressure and political factors are most relevant for product market and job protection reforms, respectively.


Workshop on Structural Reforms and European Integration: LSE
Summer School Econometrics of Panel Data and Network Analysis: Humboldt University Berlin (Poster)

IMF jobs and growth Seminar: International Monetary Fund

Germany’s Efforts to Curb International Tax Evasion
with Hannes Fauser


We evaluate the impact of regulatory attempts by German authorities to combat international tax evasion. Monthly cross-border deposits from tax havens in German banks show a 32-34% reduction in reaction to bilateral information exchange. These findings are comparable in magnitude to a number of reference studies which confirms Germany as a valid case study for international tax evasion. We show disaggregated reactions for a list of tax havens and find large reactions to information exchange for Guernsey, the Bahamas, and Jersey. We then employ a manually constructed narrative databases collecting changes in the German tax code and information leaks from tax havens. Tax evaders do not react to changes in tax rates and leaks show consistent signs but are rarely significant. These results confirm information exchange as the main focus in the analysis of international tax evasion.


IIPF annual conference: University of Tampere

16th Workshop on Public Economics: WZB, Berlin

Making the invisible visible. An empirical assessment of the Eurodollar and its consequences
with Andrea Binder


The repressed recovery from the 2008/2009 Financial Crisis has highlighted significant frictions in the US-dollar based international monetary system. Researchers argue that one reason for this predicament is the Eurodollar, i.e. money creation outside national regulation. Yet, empirical evidence on the Eurodollar system is scant as available statistical data does not distinguish between US dollar and the Eurodollar. This paper asks about the role of the Eurodollar in the international monetary order, both in size and in substance. Building on a conceptual analysis of the distinct nature of the two currencies the paper proceeds in three steps: First, we construct a global estimate of the volume of the offshore created Eurodollar and compare it to the onshore created US dollar. This is possible via a combination of national currency breakdowns and bilateral exposures to offshore financial centres available in the BIS banking data. Second, we assess the effect that the existence and size of the Eurodollar system has on US monetary policy. Finally, we discuss what the findings mean for the nature and governance of the contemporary international monetary system.


ISA annual convention: Toronto