Erasmus Kersting, PhD
Professor and Department Chair, Economics Villanova University
- Villanova PA
Erasmus Kersting, PhD, is an expert on monetary policy, inflation and economic policy.
Areas of Expertise
Biography
Dr. Kersting's latest projects explore how American politics determine the degree of U.S. influence in international financial institutions and the impact of World Bank lending on financial markets in recipient countries. His research has been published in a range of academic journals, including the European Economic Review, the Journal of Development Economics, the Review of Economic Dynamics, the Journal of Economic Dynamics and Control and the Canadian Journal of Economics.
Dr. Kersting is a native of Germany and holds a degree in economics from the Christian-Albrechts-Universität zu Kiel. He earned his doctorate in economics from Texas A&M University.
Education
Christian-Albrechts-Universität zu Kiel
Diplom
Economics
Texas A&M University
PhD
Economics
Affiliations
- Member, American Economic Association (2006–Present)
- Member, Verein für Socialpolitik (2016–Present)
Select Media Appearances
How Private Credit Could Quickly Become a Public Problem
CNN
2026-03-25
Today, private equity firms employ internal models to evaluate privately held debt—but the process is not super transparent, Erasmus Kersting, a professor of economics at the Villanova School of Business, told CNN. The sector's opacity, combined with its illiquidity, he added, can spell trouble "once blind trust is followed by an 'aha moment.'"
Gas Prices Keep Climbing as Seasonal Changes Add to Oil Price Pressure
The New York Times
2026-03-17
Gasoline costs usually trail crude increases or drops in crude oil by a few days, but that's not the only factor pushing prices higher, said Erasmus Kersting, an economics professor at Villanova University. "Demand and supply both pull and push the price up," Mr. Kersting wrote in an email. "Spring and traveling season are just around the corner, and supply constraints are being priced in, as well as expectations about how long the war and the blockade of the strait will go on for."
Gas Prices Jump and Stocks Slide as Middle East Conflict Disrupts Oil Supply
6 ABC
2026-03-03
Gas prices are climbing and financial markets are sliding as intensified fighting in the Middle East disrupts global oil supplies and fuels uncertainty... So, what's the best course of action for everyday investors? We asked Erasmus Kersting, chair of the Villanova Economics Department.
Will the Fed Cut Rates on Wednesday? See Five Economic Charts That May Determine Its Decision.
CBS MoneyWatch
2025-09-16
Federal Reserve Chair Jerome Powell has... [pointed] out that the Federal Open Market Committee, its 12-member rate-setting group, relies on economic data to make its policy decisions, rather than political pressure. "The committee tries to get a complete picture of the biggest downside risks for the economy, and then at the end of the meeting, there needs to be some sort of weighting—it's an art as much as science," noted Erasmus Kersting, an economics professor at Villanova University.
Inflation Is Creeping Higher, With Some Americans Saying They're Squeezed: "It's Really Challenging"
CBS MoneyWatch
2025-09-10
The Consumer Price Index is expected to show that prices rose at an annualized rate of 2.9% in August, up from 2.7% in July. Some economists point to the Trump administration's tariffs as a contributing factor. "Tariffs will raise prices, and that does of course lead to inflation—there's no way around that," said Erasmus Kersting, an economics professor at the Villanova School of Business.
Trump Backs Off Threat to Fire Fed Chair Powell, as Stock Market Surges
Al Jazeera
2025-04-23
Any move to remove Powell before the end of his term would likely send shockwaves through financial markets given the longstanding expectation that the Federal Reserve should make its decisions free of political considerations. "I would expect to see a dramatic fall in the stock and bond markets," Erasmus Kersting, an economics professor at Villanova University in Villanova, Pennsylvania, told Al Jazeera.
Trump Keeps Finding New Ways to Terrify Wall Street
CNN
2025-04-21
"Fighting inflation requires being non-political and non-partisan," said Erasmus Kersting, an economics professor at the Villanova School of Business. "Otherwise, the temptation to boost the economy for political gains is ever-present, and especially populist leaders have given in to that temptation all the time."
An Economist Answers: "What Is a Tariff?"
6 ABC
2025-04-04
With a flurry of economic updates leading the news cycle, we wanted to answer the very basic question: "What is a tariff?" "A tariff essentially is very much like a tax on a particular good," says Professor Erasmus Kersting, chair of Villanova University's economics department.
Donald Trump to Address Congress Amid Growing Pessimism About the Economy
USA Today
2025-03-04
"Inflation is not gone, those concerns are still there, and perhaps the Trump administration has found out that inflation is not that easy to control," said Erasmus Kersting, an economics professor at the Villanova School of Business.
How Will Trump's Tariffs Impact the Philadelphia Region?
CBS 3
2025-03-04
American-made cars could see price hikes, as many of their parts are manufactured abroad, according to Erasmus Kersting, chair of Villanova University's Department of Economics. He says no one will be spared by the tariffs... While estimates on price increases vary, Kersting said the potential impact is substantial. "Figures I have seen range from $2,000 to possibly over $10,000," he said.
The Federal Reserve Should Resist Pressure From Trump and Defend Its Independence, Experts Say
CBS MoneyWatch
2025-01-29
In the face of the Fed's rate hikes, inflation has cooled... deflating to 2.9% on an annual basis last month. "The Fed has done really well—they have raised the rates enough to try to slowly squeeze inflation out of the market," noted Erasmus Kersting, a professor of economics at Villanova University. The Fed has "done all that while avoiding a recession—that is a delicate needle to thread."
The Fed Is Hitting the Pause Button on Rate Cuts, for Now. Here's the Impact on Your Money.
CBS MoneyWatch
2025-01-29
"The reason why the Fed isn't jumping the gun at lowering the rates faster and further is that, on one hand, inflation is not gone. They looked carefully at the data, and it is still stubbornly above target, so there is concern if you lower rates further, inflation would tick up again," Erasmus Kersting, a professor of economics at Villanova University, told CBS MoneyWatch.
"Inflation Is More Costly... Than We Thought": What Voters Say Motivated Them to Vote for Trump
The Philadelphia Inquirer
2024-11-11
After the 1990s, there was a seismic shift in ideas about voter attitudes that popularized the phrase "It's the economy, stupid," Villanova University's Erasmus Kersting recalled. He emphasized the dramatic impact that pandemic-fueled inflation seems to have had on the nation's psyche even years later. "I think one thing that we might be learning is that inflation is more costly, politically speaking, than we thought," Kersting said.
Where Does Inflation Stand in the Swing-State Cities That Could Decide the Election?
ABC News
2024-10-14
The prices for nonalcoholic beverages in Philadelphia have climbed more than six times faster than the national average over the past year. Erasmus Kersting, a professor of economics at Villanova University, said the sharp increase in prices for some food items may be owed to a lack of competition among grocery stores in Philadelphia. In the absence of fierce competition, grocery stores retain the latitude to raise prices without fear of a rival offering a better deal on comparable products, Kersting explained.
Volkswagen's Woes Reflect a Stagnant German Economy
The New York Times
2024-10-09
The European Union is readying to increase tariffs on electric vehicles imported from China, with the aim of leveling the playing field for European automakers, which they argue have not benefited from the amount of state subsidies that their Chinese counterparts receive. But Volkswagen, which is heavily invested in China, and the German government oppose the levies... "There should just be an eye toward less regulation and more allowing firms to be more nimble and encouraging further investment," said Erasmus Kersting, a professor of economics at Villanova University who grew up in Hanover and studies the Germany economy.
Powell: Time to Lower Interest Rates Has Arrived
U.S. News & World Report
2024-08-23
What is particularly unsettling about the recent spike in prices is that they came after a historic period when interest rates were low. At first, consumers seemed willing to pay the higher prices as they accepted that it was because of supply chain disruptions. But, as claims of price-gouging began to gain traction, large companies like Walmart, McDonald's and Target began lowering prices and offering discounted products. "Maybe something like price sensitivity has to be learned," says Erasmus Kersting, an economics professor at Villanova University.
Select Academic Articles
How Do Stock Markets in Emerging Economies Respond to World Bank Loan Approvals?
Emerging Markets Review2024
This paper examines the impact of World Bank loan approvals on equity markets in borrowing countries. We exploit a rich dataset with World Bank loan commitments and daily stock market returns for 47 emerging markets, allowing us to study short-run market reactions to news about World Bank programs. These programs fall into three categories: investment projects, structural adjustment loans that tie future macroeconomic reforms to future loan disbursements (prior to FY2006) and development policy loans that reward completed macroeconomic reforms with current loan disbursements (since FY2006). Event study analysis shows positive abnormal stock market returns on the trading day following investment project loan announcements.
Do Domestic Politics Shape U.S. Influence in the World Bank?
The Review of International Organizations2018
Do United States presidential administrations exert more informal influence over international financial institutions when they face an uncooperative Congress and thus have less control over bilateral aid? Reexamining four empirical studies of the World Bank, we demonstrate that U.S. informal influence is driven by years with divided U.S. government. This provides a richer picture of when and why the U.S. exerts influence in multilateral settings and an alternate explanation to persistent questions about the role of international organizations in the international political economy.
With a Little Help From My Friends: Global Electioneering and World Bank Lending
Journal of Development Economics2016
This paper investigates how World Bank lending responds to upcoming elections in borrowing countries. We find that investment project loans disburse faster when countries are aligned with the United States in the United Nations. Moreover, disbursement accelerates in the run-up to competitive executive elections if the government is geopolitically aligned with the U.S. but decelerates if the government is not. These disbursement patterns are consistent with global electioneering that serves U.S. foreign policy interests but jeopardizes the development effectiveness of multilateral lending.
Aid and Democracy Redux
European Economic Review2014
This paper uses Freedom House ratings to assess the impact of foreign aid on democracy. We employ an interval regression to account for Freedom House's method of rating countries. A cross-sectional analysis examining the long-run effect of aid on democracy in 122 countries between 1972 and 2011 finds a significant positive relationship that survives various tests for endogeneity. A short-run annual panel analysis of 156 countries between 1985 and 2011 explores whether aid operates through leverage and conditionality. We present evidence that (1) donors allocate aid in response to democratization and (2) recipient countries respond to this incentive for democratic reform. Our identification strategy relies on the reduced importance of democratization in the allocation of aid to geopolitically important countries.
