History, Microdata, and Endogenous Growth
Ufuk Akcigit, Tom Nicholas
Annual Review of Economics,
2019
Abstract
The study of economic growth is concerned with long-run changes, and therefore, historical data should be especially influential in informing the development of new theories. In this review, we draw on the recent literature to highlight areas in which study of history has played a particularly prominent role in improving our understanding of growth dynamics. Research at the intersection of historical data, theory, and empirics has the potential to reframe how we think about economic growth in much the same way that historical perspectives helped to shape the first generation of endogenous growth theories.
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East Germany Three Decades After the Wall Came Down: What has Been Achieved and What Should Economic Policy Do?
Reint E. Gropp, Gerhard Heimpold
Wirtschaftsdienst,
No. 7,
2019
Abstract
The persistent difference in productivity between East and West Germany not only results from the relative absence of large firms based in the East as many believe. Companies of all sizes exhibit an East-West productivity gap. The gap is larger in urban regions. Scarcity of skilled labour has emerged as the new barrier to business development. In order to boost productivity, economic policy should avoid additional subsidies that are conditional on creating jobs. Additionally, the potential of East German urban areas should be better explored. Mitigating the shortage in qualified workers requires in-migration of skilled labour from abroad, supported by an open mindset and environment.
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09.07.2019 • 17/2019
IWH rated "very good" and recommended for further funding
The Halle Institute for Economic Research (IWH) – Member of the Leibniz Association has been providing remarkable research and policy advice services for many years and should therefore continue to receive joint basic funding by Federal government and the Länder in future. This was the conclusion of today's meeting of the Senate of the Leibniz Association. At the end of the evaluation, the Institute was rated "very good" in all areas.
Reint E. Gropp
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Klimaschutz und Kohleausstieg: Politische Strategien und Maßnahmen bis 2030 und darüber hinaus
Pao-Yu Oei, Casimir Lorenz, Sophie Schmalz, Hanna Brauers, Philipp Herpich, Christian von Hirschhausen, Claudia Kemfert, Barbara Dröschel, Jan Hildebrand, Juri Horst, Uwe Klann, Patrick Matschoss, Michael Porzig, Irina Rau, Bernhard Wern, Hans-Ulrich Brautzsch, Gerhard Heimpold, Katja Heinisch, Oliver Holtemöller, Christoph Schult, Hauke Hermann, Dirk Heyen, Katja Schumacher, Cornelia Ziehm
Pao-Yu Oei et al., Klimaschutz und Kohleausstieg: Politische Strategien und Maßnahmen bis 2030 und darüber hinaus. Abschlussbericht. Climate Change 27/2019. Dessau-Roßlau: Umweltbundesamt,
2019
published in: Energy
Abstract
The present study examines the socio-economic consequences of a climate policy-driven coal phase-out in Germany. A focus lies on the lignite industry – especially in the lignite regions. In a first step, the regions are spatially defined and described. Additional analysis is based on energy economic modelling. The model examines phase-out scenarios, which differ in the chosen criteria for the order of power plant closure (specific emissions or plant age). An input-output-model and a regional macroeconomic model build up on these phase-out pathways and examine the socio economic effects of the phase-out in the lignite regions as well as in the rest of Germany. The combination of both models offers the advantage to consider the phase-out from different perspective and hence derive different and more robust effects. The models show, on the one hand, that in an early phase-out the negative effects of structural change are visible earlier. On the other hand, recuperative effects can counteract the negative consequences according to the regional economic model.
Furthermore, the structural change creates economic opportunities. Those opportunities are primarily diversified economic activities. Case studies show significant employment potentials for the lignite regions. New jobs in renewable energies and energetic optimization of buildings can already counteract the negative employment effects associated with the investigated structural change. The study concludes, describing accompanying political instruments that can support the regions on their way to master the challenges of the up-coming structural change.
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26.06.2019 • 14/2019
Study: How financial crises lower life satisfaction and how to prevent this
Financial crises not only result in severe disruptions to the economic system, they also affect people’s life satisfaction. A new study by Martin Luther University Halle-Wittenberg (MLU) and the Halle Institute for Economic Research (IWH) shows that weaker members of society are more affected by increased uncertainty during crisis times, even if they may not be speculating on the stock market themselves. This could potentially also lower their propensity to consume, thereby intensifying the impact of a financial crisis. The study was recently published in “The B.E. Journal of Economic Analysis & Policy”.
Lena Tonzer
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The Economic Impact of Changes in Local Bank Presence
Iftekhar Hasan, Krzysztof Jackowicz, Oskar Kowalewski, Łukasz Kozłowski
Regional Studies,
No. 5,
2019
Abstract
This study analyzes the economic consequences of changes in the local bank presence. Using a unique data set of banks, firms and counties in Poland over the period 2009–14, it is shown that changes strengthening the relationship banking model are associated with local labour market improvements and easier small and medium-sized enterprise access to bank debt. However, only the appearance of new, more aggressive owners of large commercial banks stimulates new firm creation.
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Delay Determinants of European Banking Union Implementation
Michael Koetter, Thomas Krause, Lena Tonzer
European Journal of Political Economy,
2019
Abstract
Most countries in the European Union (EU) delay the transposition of European Commission (EC) directives, which aim at reforming banking supervision, resolution, and deposit insurance. We compile a systematic overview of these delays to investigate if they result from strategic considerations of governments conditional on the state of their financial, regulatory, and political systems. Transposition delays pertaining to the three Banking Union directives differ considerably across the 28 EU members. Bivariate regression analyses suggest that existing national bank regulation and supervision drive delays the most. Political factors are less relevant. These results are qualitatively insensitive to alternative estimation methods and lag structures. Multivariate analyses highlight that well-stocked deposit insurance schemes speed-up the implementation of capital requirements, banking systems with many banks are slower in implementing new bank rescue and resolution rules, and countries with a more intensive sovereign-bank nexus delay the harmonization of EU deposit insurance more.
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Structural Interpretation of Vector Autoregressions with Incomplete Identification: Revisiting the Role of Oil Supply and Demand Shocks
Christiane Baumeister, James D. Hamilton
American Economic Review,
No. 5,
2019
Abstract
Traditional approaches to structural vector autoregressions (VARs) can be viewed as special cases of Bayesian inference arising from very strong prior beliefs. These methods can be generalized with a less restrictive formulation that incorporates uncertainty about the identifying assumptions themselves. We use this approach to revisit the importance of shocks to oil supply and demand. Supply disruptions turn out to be a bigger factor in historical oil price movements and inventory accumulation a smaller factor than implied by earlier estimates. Supply shocks lead to a reduction in global economic activity after a significant lag, whereas shocks to oil demand do not.
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01.04.2019 • 8/2019
Bank profitability increases after eliminating consolidation barriers
When two banks merge because political consolidation barriers are abolished, the combined entity is considerably more profitable and useful to the real economy. This is the headline result of an analysis of compulsory savings banks mergers carried out by the Halle Institute for Economic Research (IWH). The study yields important insights for the German and the European banking market.
Michael Koetter
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Private Equity and Financial Fragility During the Crisis
Shai B. Bernstein, Josh Lerner, Filippo Mezzanotti
Review of Financial Studies,
No. 4,
2019
Abstract
Does private equity (PE) contribute to financial fragility during economic crises? The proliferation of poorly structured transactions during booms may increase the vulnerability of the economy to downturns. During the 2008 crisis, PE-backed companies decreased investments less than did their peers and experienced greater equity and debt inflows, higher asset growth, and increased market share. These effects are especially strong among financially constrained companies and those whose PE investors had more resources at the crisis onset. In a survey, PE firms report being active investors during the crisis and spending more time working with their portfolio companies.
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