Meguy Kuete, Deutsche Bundesbank

"Working at the IMFS enabled me to keep up with advances of the scientific discussion"

Meguy Kuete worked at the IMFS from 2014 to 2018. Born in Cameroon, he came to Germany to study mathematics in Darmstadt, and after that, joined the Ph.D. program at Goethe University. As a member of the Macro Model Base team, Meguy was involved in the integration of further macroeconomic models in the computational platform. He also contributed to the chapter on new methods for macro-financial model comparison for the Handbook of Macroeconomics edited by John B. Taylor and Harald Uhlig. In April 2018, Meguy took up a position as methodology expert at the Directorate of General Markets of Deutsche Bundesbank.

How would you describe your job to other people?

I work as a methodology expert at the Directorate of General Markets. I am member of the Common Eurosystem Pricing Hub (CEPH), which is a platform aiming at valuating collaterals eligible for the credit and reserves operations. In the team, my task is to explore new methods for the valuation of fixed income securities, and to develop quantitative frameworks for pricing such assets. Through this process, we obtain theoretical prices, which are then compared with prices observed in the markets.

What are your main tasks at Deutsche Bundesbank?

My main task is the evaluation and extension of pricing models as well as their implementation. All models start out as theoretical and technical, and end up cross validated with real data. An important aspect of my task is to share new findings and methods within the Eurosystem. I draft notes and generate test data, which are then distributed to all national central banks and the ECB. To give a specific example, one of my first projects at the bank was to derive models for pricing inflation indexed bonds.

What do you like most about your job?

The job at the Bundesbank delights me. First of all, I enjoy comparing theoretic predictions to what is actually observed in the markets. In addition, market data of high quality are available at arm’s length and the position gives me the possibility to observe the effect of monetary policy decisions beyond macroeconomic aggregates. Finally, the Bundesbank is an exceptional working place. Not only the professional integrity of its personal is exemplary, but its reputation, openness and strength of cooperation with other major policy institutions as well. I am very thankful for the opportunity of working for such an outstanding institution.

What was the main focus of your research at the IMFS?

At the IMFS, my research was related to macroeconomic modelling and model-based economic previsions. I joined the IMFS when Prof. Wieland and the then-MMB team were upgrading the Macro Model Base (MMB) with new model comparison features and integrating models with financial frictions in MMB. This project led to our Handbook chapter. Later we extended the project to toward real-time estimation and forecasting with structural models. In parallel, I also worked on my single-authored paper “Liquidity premium and quantitative effects of central bank balance sheet policies.”

How is your job at the Bundesbank related to your work at the IMFS?

At the IMFS, I worked on model comparison and forecasting with structural models and learned about complex computational and quantitative methodologies. The diversity is best displayed by the MMB, most models I worked on featured completely different modeling techniques and sometimes represented different modelling-paradigms. In finance and in economics alike, methods and model evaluations have experienced considerable changes since the financial crisis. In this innovative environment, consensuses are still building and very fragile. Working at the IMFS enabled me to keep up with advances of the scientific discussion. The comparison approaches I learned at the IMFS have increased my effectiveness in drawing sound inferences from different point the view.

What did you enjoy most regarding your time as doctorate at the IMFS?

The IMFS is unique as is offers doctorate students the opportunity to be exposed to the most relevant and leading economic research while requiring you to conduct research at the highest standards. In that respect, I have enjoyed every presentation of the IMFS Distinguished Lectures series and I would like to thank former colleagues and the rest of the IMFS staff for the always positive and inspiring environment.