Power Generation and Structural Change: Quantifying Economic Effects of the Coal Phase-out in Germany
IWH Discussion Papers,
In the fight against global warming, the reduction of greenhouse gas emissions is a major objective. In particular, a decrease in electricity generation by coal could contribute to reducing CO2 emissions. Using a multi-region dynamic general equilibrium model, this paper studies potential economic consequences of a coal phase-out in Germany. Different regional phase-out scenarios are simulated with varying timing structures. We find that a politically induced coal phase-out would lead to an increase in the national unemployment rate by about 0.10 percentage points from 2020 to 2040, depending on the specific scenario. The effect on regional unemployment rates varies between 0.18 to 1.07 percentage points in the lignite regions. However, a faster coal phase-out can lead to a faster recovery. The coal phase-out leads to migration from German lignite regions to German non-lignite regions and reduces the labour force in the lignite regions by 10,000 people by 2040.
Do Conventional Monetary Policy Instruments Matter in Unconventional Times?
Deutsche Bundesbank Discussion Paper,
This paper investigates how declines in the deposit facility rate set by the ECB affect euro area banks’ incentives to hold reserves at the central bank. We find that, in the face of lower deposit rates, banks with a more interest-sensitive business model are more likely to reduce reserve holdings and allocate freed-up liquidity to loans. The result is driven by well-capitalized banks in the non-GIIPS countries of the euro area. This reveals that conventional monetary policy instruments have limited effects in restoring monetary policy transmission during times of crisis.
IWH issues warning of a new banking crisis The coronavirus recession could mean the end for dozens of banks across...
02.07.2019 • 16/2019
Weiter gute Stimmung in Sachsen-Anhalts Mittelstand
Der Mittelstand in Sachsen-Anhalt verzeichnet bislang keine stärkere Konjunkturabschwächung. Das geht aus einer gemeinsamen Umfrage von Creditreform und Leibniz-Institut für Wirtschaftsforschung Halle (IWH) hervor, an der sich 465 vorrangig kleine und mittlere Unternehmen aus Sachsen-Anhalt beteiligt haben. Die überwiegende Mehrzahl der befragten Unternehmen (72,4%) schätzt die aktuelle Geschäftslage weiterhin mit „sehr gut“ bzw. „gut“ ein. In der Vorjahresumfrage gab es ähnlich viele positive Meldungen (75,2% der Befragten). Günstig für die Wirtschaftslage im Mittelstand sind weiterhin die kräftige Binnennachfrage, der private Konsum und die Bautätigkeit.
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Transformation tables for administrative borders in Germany
Transformation tables for administrative borders in Germany The state has the ability...
The Economic Impact of Changes in Local Bank Presence
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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Lock‐in Effects in Relationship Lending: Evidence from DIP Loans
Journal of Money, Credit and Banking,
Do prior lending relationships result in pass‐through savings (lower interest rates) for borrowers, or do they lock in higher costs for borrowers? Theoretical models suggest that when borrowers experience greater information asymmetry, higher switching costs, and limited access to capital markets, they become locked into higher costs from their existing lenders. Firms in Chapter 11 seeking debtor‐in‐possession (DIP) financing often fit this profile. We investigate the presence of lock‐in effects using a sample of 348 DIP loans. We account for endogeneity using the instrument variable (IV) approach and the Heckman selection model and find consistent evidence that prior lending relationship is associated with higher interest costs and the effect is more severe for stronger existing relationships. Our study provides direct evidence that prior lending relationships do create a lock‐in effect under certain circumstances, such as DIP financing.