Martin Geiger’s habilitation successfully completed
The cumulative habilitation thesis contains a total of twelve empirical papers that have been published in academic journals. Among other things, Geiger shows that expectations often react to economic shocks in line with theory. However, the influence of these shocks on economic decisions and specifically on consumption remains limited. Another focus is on analyzing the role of uncertainty in times of economic crisis, such as those triggered by Brexit or the COVID-19 pandemic.
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Public event: Macroeconomic shocks, expectations and uncertainty
On the occasion of the completion of the habilitation process, Martin Geiger will present selected studies and key findings in a public lecture on September 18, 2025, 4 p.m. and discuss them in the light of current macroeconomic challenges.
To the event
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SELECTED STUDIES AND KEY FINDINGS
The costs of Brexit and the role of UK monetary policy
Although Brexit is generally regarded as an event that coincides with the UK's referendum on its EU membership on June 23, 2016, there were many uncertainties and increased economic policy uncertainty between the referendum and the conclusion of the withdrawal agreement.
The study analyzes how uncertainty regarding the expected new modus operandi in the course of Brexit influenced the economy and financial markets. A systematic chronology of Brexit events is used to measure economic policy dislocations based on stock prices, exchange rates and media releases.
Brexit had a negative impact on UK economic activity and consumer confidence and caused inflation to rise. The study also shows that without the Bank of England's monetary policy countermeasures, the effects would have been much more serious.
Monetary policy and consumer expectations in the eurozone
The formation of expectations is seen as a central element of the impact of monetary policy. Using Europe-wide harmonized survey data, this study examines how the ECB's interest rate policy influences assessments of future price and employment developments.
The results presented in the study show that consumers' assessments of the macroeconomic effects are largely in line with current economic models. Although the countries of the eurozone are characterized by economic and institutional differences, the expectations regarding the macroeconomic consequences of the ECB's interest rate policy are largely accurate and relatively homogeneous across the countries of the eurozone. The ECB's interest rate policy is particularly effective in terms of managing price expectations, while employment expectations react somewhat differently to interest rate changes in the individual countries.
Interpretation of macroeconomic developments by the population
Using survey data, we examine how the general population processes economic fluctuations triggered by demand, production or monetary policy. The results presented show that the effects of these fluctuations on unemployment, inflation and interest rates expected by the population on average are largely in line with macroeconomic theory. In addition, the population's assessments are qualitatively similar to those of professional economic forecasters.
In economics, it has long been assumed that forming expectations is a demanding, deliberate process that requires economic understanding and statistical skills - skills that are usually only attributed to professional forecasters. It is therefore all the more surprising that the general population also interprets economic developments relatively accurately. At the same time, the results show that their ability to process macroeconomic information is limited: Only a small proportion of the adjustments to expectations can actually be explained by economic developments. This points to a so-called "rational inattention" - people perceive relevant information selectively, which reduces the impact of economic changes on their expectations.
