Macroeconomic Analyses and Forecasts

The research group comprises all macroeconomic analyses, forecasts and policy papers that are carried out on a regular basis at the IWH. These reports contribute significantly to the IWH being one of the leading economic research institutes in Germany. The group focuses on current macroeconomic perspectives in Germany. However, forecasts for an open economy like the German one have to start from thorough and up-to-date analysis of the world economy. Special attention is given to East Germany, Central European countries, and to the European Union as a whole.

Research in this group is linked closely to other projects within the cluster that focus on publishing research papers in refereed journals. In particular, econometric tools developed by Research Group Econometric Tools for Macroeconomic Forecasting and Simulation are applied for the macroeconomic projections, and policy conclusions derived by Research Group Monetary Aggregates, Asset Prices and Real Outcomes are important building blocks for policy recommendations.

IWH Data Project: IWH Macrometer: Macroeconomic Database for the German Länder, East and West Germany

All of the group’s macroeconomic analyses, forecasts and policy papers are available via the Current Forecasting section.

Research Cluster
Macroeconomic Dynamics and Stability

Your contact

Dr Axel Lindner
Dr Axel Lindner
Mitglied - Department Macroeconomics
Send Message +49 345 7753-703

EXTERNAL FUNDING

01.2017 ‐ 12.2017

Flash Estimate of the Quarterly GDP in Germany

Verlagsgruppe Handelsblatt

Dr Katja Heinisch

07.2013 ‐ 06.2016

Joint Economic Forecast

Federal Ministry for Economic Affairs and Energy (BMWI)

The joint economic forecast is an instrument for evaluating the overall economic situation and development in Germany, the euro area and the rest of the world. For this purpose, forecasts of economic activity are generated for the global economy and its major regions. Economic policy recommendations are derived from these forecasts for the euro area and the German economy. The objective of the joint diagnosis, which is commissioned by the Federal Finance Ministry, is to produce a uniform evaluation by all participating institutes. The results are published twice a year as spring and fall forecasts.

Professor Dr Oliver Holtemöller

12.2015 ‐ 12.2016

Conference “How Can We Boost Competition in the Services Sector?”

European Commission

Professor Dr Oliver Holtemöller

07.2016 ‐ 06.2022

Joint Economic Forecast

Federal Ministry for Economic Affairs and Energy (BMWI)

The joint economic forecast is an instrument for evaluating the overall economic situation and development in Germany, the euro area and the rest of the world. For this purpose, forecasts of economic activity are generated for the global economy and its major regions. Economic policy recommendations are derived from these forecasts for the euro area and the German economy. The objective of the joint diagnosis, which is commissioned by the Federal Finance Ministry, is to produce a uniform evaluation by all participating institutes. The results are published twice a year as spring and fall forecasts.

Professor Dr Oliver Holtemöller

01.2013 ‐ 12.2018

Flash Estimate of the Quarterly GDP in Germany

Verlagsgruppe Handelsblatt

Dr Katja Heinisch

09.2015 ‐ 03.2016

Messung der Elastizität der veranlagten Einkommensteuer in Relation zu den Unternehmens- und Vermögenseinkommen

Federal Ministry of Finance (BMF)

Dr Götz Zeddies

01.2012 ‐ 12.2015

Quarterly Report on the Economy in Saxony-Anhalt

Ministry of Economy, Science and Digitalisation of the State of Sachsen-Anhalt

Professor Dr Oliver Holtemöller

Business Cycle Forecasts and Stress Scenarios

Volkswagen Financial Services AG

Professor Dr Oliver Holtemöller

01.2013 ‐ 12.2015

Ökonomische Wirksamkeit der Konjunktur stützenden finanzpolitischen Maßnahmen der Jahre 2008 und 2009

Federal Ministry of Finance (BMF)

Professor Dr Oliver Holtemöller

Refereed Publications

cover_journal-of-economic-and-social-measurement.jpg

Alternatives to GDP - Measuring the Impact of Natural Disasters using Panel Data

Jörg Döpke Philip Maschke

in: Journal of Economic and Social Measurement, No. 3, 2016

Abstract

A frequent criticism of GDP states that events that obviously reduce welfare of people can nevertheless increase GDP per capita. We use data of natural disasters as quasi experiments to examine whether alternatives to GDP (Human Development Index, Progress Index, Index of Economic Well-Being and a Happiness Index) lead to more plausible responses to disasters. Applying a Differences-in-Differences approach and estimates from various panels of countries we find no noteworthy differences between the response of real GDP per capita and the responses of suggested alternative welfare measures to a natural disaster except for the Human Development Index.

read publication

cover_list-forum-für-wirtschafts-und-finanzpolitik.jpg

Green Technologies as Industrial Policy Concept? The South of Saxony-Anhalt as a Case Example

Jörg Döpke Philip Maschke C. Altmann D. Bieräugel

in: List Forum für Wirtschafts- und Finanzpolitik, No. 1, 2015

Abstract

The federal action called Energiewende and the Renewable Energy Act (EEG) as part of it have produced hopes in Saxony-Anhalt which were particularly connected with the promotion of green technologies. This paper is composed of an impact analysis of subsidies in general and addresses the impacts of the EEG on companies. Therefore, results of a survey among companies are used that has been conducted in 2013 by the Chamber of Commerce and Industry (CCI) Halle-Dessau in the south of the German State of Saxony-Anhalt.

read publication

cover_applied-economics-quarterly.jpg

Are there Business Cycles “beyond GDP“? Alternative Measures to GDP at Business Cycle Frequencies

Jörg Döpke Philip Maschke

in: Applied Economics Quarterly, No. 2, 2015

Abstract

We discuss properties of alternatives or complements to GDP as a measure of welfare at business cycle frequencies. Our results imply that the suggested indicators show practically no cycle at all and their methodologies can be questioned. First, data are not available at an appropriate quality and frequency. Second, the suggested time series sometimes correlate negatively with each other. Third, cross-section and quasi-panel evidence based on different samples of countries reveals no impact of the stance of the business cycle on some suggested welfare measures. Therefore, alternative welfare measures do not show an equal picture on business cycle frequencies compared to GDP-based measures.

read publication

cover_research-policy.jpg

Can R&D Subsidies Counteract the Economic Crisis? – Macroeconomic Effects in Germany

Hans-Ulrich Brautzsch Jutta Günther Brigitte Loose Udo Ludwig Nicole Nulsch

in: Research Policy, No. 3, 2015

Abstract

During the economic crisis of 2008 and 2009, governments in Europe stabilized their economies by means of fiscal policy. After decades of absence, deficit spending was used to counteract the heavy decline in demand. In Germany, public spending went partially into R&D subsidies in favor of small and medium sized enterprises. Applying the standard open input–output model, the paper analyzes the macroeconomic effects of R&D subsidies on employment and production in the business cycle. Findings in the form of backward multipliers suggest that R&D subsidies have stimulated a substantial leverage effect. Almost two thirds of the costs of R&D projects are covered by the enterprises themselves. Overall, a subsidized R&D program results in a production, value added and employment effect that amounts to at least twice the initial financing. Overall, the R&D program counteracts the decline of GDP by 0.5% in the year 2009. In the year 2010 the effects are already procyclical since the German economy recovered quickly. Compared to the strongly discussed alternative uses of subsidies for private consumption, R&D spending is more effective.

read publication

cover_european_journal_of_comparative_economics.jpg

Skill Content of Intra-european Trade Flows

Götz Zeddies

in: European Journal of Comparative Economics, No. 1, 2013

Abstract

In recent decades, the international division of labor has expanded rapidly in the wake of European integration. In this context, especially Western European high-wage countries should have specialized on (human-)capital intensively manufactured goods and should have increasingly sourced labor-intensively manufactured goods, especially parts and components, from Eastern European low wage countries. Since this should be beneficial for the high-skilled and harmful to the lower-qualified workforce in high-wage countries, the opening up of Eastern Europe is often considered as a vital reason for increasing unemployment of the lower-qualified in Western Europe. This paper addresses this issue by analyzing the skill content of Western European countries’ bilateral trade using input-output techniques in order to evaluate possible effects of international trade on labor demand. Thereby, differences in factor inputs and production technologies have been considered, allowing for vertical product differentiation. In this case, skill content of bilateral exports and imports partially differs substantially, especially in bilateral trade between Western and Eastern European countries. According to the results, East-West trade should be harmful particularly to the medium-skilled in Western European countries.

read publication

Working Papers

cover_DP_2019-04.jpg

Potential International Employment Effects of a Hard Brexit

Hans-Ulrich Brautzsch Oliver Holtemöller

in: IWH Discussion Papers, No. 4, 2019

Abstract

We use the World Input Output Database (WIOD) to estimate the potential employment effects of a hard Brexit in 43 countries. In line with other studies we assume that imports from the European Union (EU) to the UK will decline by 25% after a hard Brexit. The absolute effects are largest in big EU countries which have close trade relationships with the UK like Germany and France. However, there are also large countries outside the EU which are heavily affected via global value chains like China, for example. The relative effects (in percent of total employment) are largest in Malta and Ireland. UK employment will also be affected via intermediate input production. Within Germany, the motor vehicle industry and in particular the “Autostadt” Wolfsburg are most affected.

read publication

cover_DP_2018-06.jpg

The Economic Development of Saxony-Anhalt since 1990

Oliver Holtemöller Axel Lindner

in: IWH Discussion Papers, No. 6, 2018

Abstract

This article describes the economic development of Saxony-Anhalt since 1990 in the context of the East German transition from a centrally planned economy to a market economy. In the early 1990s the economy of Saxony-Anhalt caught up quickly with West Germany, mainly because the capital stock was modernized and expanded. Convergence, however, has almost come to a halt for some time now and gross domestic product per employed person is still about 20% below the West German level. The challenge for economic policy is to further the catching-up process by fostering research and innovation and improving the skills of the workforce.

read publication

cover_DP_2017-31.jpg

The Minimum Wage Effects on Skilled Crafts Sector in Saxony-Anhalt

Hans-Ulrich Brautzsch Birgit Schultz

in: IWH Discussion Papers, No. 31, 2017

Abstract

This paper examines the effects of the minimum wage introduction in Germany in 2015 on the skilled crafts sector in Saxony-Anhalt. Using novel survey data on the skilled crafts sector in Saxony-Anhalt, we examine three questions: (1) How many employees are affected by the minimum wage introduction in the skilled crafts sector in Saxony- Anhalt? (2) What are the effects of the minimum wage introduction? (3) How have firms reacted to wage increase? We find that about 8% of all employees in the skilled crafts sector in Saxony-Anhalt are directly affected by the minimum wage introduction. A difference-in-difference estimation reveals no significant employment effects of the minimum wage introduction. We test for alternative adjustment strategies and observe a significant increase of output prices.

read publication

cover_DP_2017-28.jpg

Employment Effects of Introducing a Minimum Wage: The Case of Germany

Oliver Holtemöller Felix Pohle

in: IWH Discussion Papers, No. 28, 2017

Abstract

This paper contributes to the empirical literature on the employment effects of minimum wages. We analysed the introduction of a statutory minimum wage in Germany in 2015 exploiting cross-sectional variation of the minimum wage affectedness. We construct two variables that measure the affectedness for approximately 300 state-industry combinations based on aggregate monthly income data. The estimation strategy consists of two steps. We test for (unidentified) structural breaks in a model with cross-section specific trends to control for state-industry specific developments prior to 2015. In a second step, we test whether the trend deviations are correlated with the minimum wage affectedness. To identify the minimum wage effect on employment, we assume that the minimum wage introduction is exogenous. Our results point towards a negative effect on marginal employment and a positive effect on socially insured employment. Furthermore, we analyse if the increase in socially insured employment is systematically related to the reduction of marginal employment but do not detect evidence.

read publication

cover_FIW-Working-Paper_2015-january.jpg

Switching to Exchange Rate Flexibility? The Case of Central and Eastern European Inflation Targeters

Andrej Drygalla

in: FIW Working Paper, Nr. 139, No. 139, 2015

Abstract

This paper analyzes changes in the monetary policy in the Czech Republic, Hungary, and Poland following the policy shift from exchange rate targeting to inflation targeting around the turn of the millennium. Applying a Markovswitching dynamic stochastic general equilibrium model, switches in the policy parameters and the volatilities of shocks hitting the economies are estimated and quantified. Results indicate the presence of regimes of weak and strong responses of the central banks to exchange rate movements as well as periods of high and low volatility. Whereas all three economies switched to a less volatile regime over time, findings on changes in the policy parameters reveal a lower reaction to exchange rate movements in the Czech Republic and Poland, but an increased attention to it in Hungary. Simulations for the Czech Republic and Poland also suggest their respective central banks, rather than a sound macroeconomic environment, being accountable for reducing volatility in variables like inflation and output. In Hungary, their favorable developments can be attributed to a larger extent to the reduction in the size of external disturbances.

read publication
Mitglied der Leibniz-Gemeinschaft LogoTotal-Equality-LogoWeltoffen Logo