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Evidence-based Support for Adaptation Policies in Emerging Economies
Maximilian Banning, Anett Großmann, Katja Heinisch, Frank Hohmann, Christian Lutz, Christoph Schult
Low Carbon Economy,
No. 1,
2023
Abstract
Climate change is increasingly evident, and the design of effective climate adaptation policies is important for regional and sectoral economic growth. We propose different modelling approaches to quantify the socio-economic impacts of climate change on three vulnerable countries (Kazakhstan, Georgia, and Vietnam) and design specific adaptations. We use a Dynamic General Equilibrium (DGE) model for Vietnam and an economy-energy-emission (E3) model for the other two countries. Our simulations until 2050 show that selected adaptation measures, in particular in the agricultural sector, have positive implications for GDP. However, some adaptation measures can even increase greenhouse gas emissions. Focusing on GDP alone can lead to welfare-reducing policy decisions.
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10.08.2022 • 18/2022
IWH-Insolvenztrend: Keine Insolvenzwelle, aber mehr Firmenpleiten als im Vorjahr zu erwarten
Die Zahl der Insolvenzen von Personen- und Kapitalgesellschaften bleibt im Juli trotz schwierigem Umfeld niedrig, zeigt die aktuelle Analyse des Leibniz-Instituts für Wirtschaftsforschung Halle (IWH).
Steffen Müller
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Offshoring, Domestic Employment and Production. Evidence from the German International Sourcing Survey
Wolfhard Kaus, Markus Zimmermann
IWH Discussion Papers,
No. 14,
2022
Abstract
This paper analyses the effect of offshoring (i.e., the relocation of activities previously performed in-house to foreign countries) on various firm outcomes (domestic employment, production, and productivity). It uses data from the International Sourcing Survey (ISS) 2017 for Germany, linked to other firm level data such as business register and ITGS data. First, we find that offshoring is a rare event: In the sample of firms with 50 or more persons employed, only about 3% of manufacturing firms and 1% of business service firms have performed offshoring in the period 2014-2016. Second, difference-in-differences propensity score matching estimates reveal a negative effect of offshoring on domestic employment and production. Most of this negative effect is not because the offshoring firms shrink, but rather because they don’t grow as fast as the non-offshoring firms. We further decompose the underlying employment dynamics by using direct survey evidence on how many jobs the firms destroyed/created due to offshoring. Moreover, we do not find an effect on labour productivity, since the negative effect on domestic employment and production are more or less of the same size. Third, the German data confirm previous findings for Denmark that offshoring is associated with an increase in the share of ‘produced goods imports’, i.e. offshoring firms increase their imports for the same goods they continue to produce domestically. In contrast, it is not the case that offshoring firms increase the share of intermediate goods imports (a commonly used proxy for offshoring), as defined by the BEC Rev. 5 classification.
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The Impact of Active Aggregate Demand on Utilisation-adjusted TFP
Konstantin Gantert
IWH Discussion Papers,
No. 9,
2022
Abstract
Non-clearing goods markets are an important driver of capacity utilisation and total factor productivity (TFP). The trade-off between goods prices and household search effort is central to goods market matching and therefore drives TFP over the business cycle. In this paper, I develop a New-Keynesian DSGE model with capital utilisation, worker effort, and expand it with goods market search-and-matching (SaM) to model non-clearing goods markets. I conduct a horse-race between the different capacity utilisation channels using Bayesian estimation and capacity utilisation survey data. Models that include goods market SaM improve the data fit, while the capital utilisation and worker effort channels are rendered less important compared to the literature. It follows that TFP fluctuations increase for demand and goods market mismatch shocks, while they decrease for technology shocks. This pattern increases as goods market frictions increase and as prices become stickier. The paper shows the importance of non-clearing goods markets in explaining the difference between technology and TFP over the business cycle.
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The Crisis is Gradually Being Overcome
Martin Gornig, Oliver Holtemöller, Stefan Kooths, Torsten Schmidt, Timo Wollmershäuser
Wirtschaftsdienst,
No. 10,
2021
Abstract
The leading economic research institutes have lowered their GDP growth forecast for 2021 from 3.7 % to 2.4 %. Weakening industrial production, which is suffering from supply bottlenecks, is particularly responsible for this. The global economy is recovering from the disruptions of the coronavirus pandemic, but only slowly, as vaccination progress varies across regions. Consumer prices increased sharply in 2021.
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International Trade Barriers and Regional Employment: The Case of a No-Deal Brexit
Hans-Ulrich Brautzsch, Oliver Holtemöller
Journal of Economic Structures,
No. 11,
2021
Abstract
We use the World Input–Output Database (WIOD) combined with regional sectoral employment data to estimate the potential regional employment effects of international trade barriers. We study the case of a no-deal Brexit in which imports to the United Kingdom (UK) from the European Union (EU) would be subject to tariffs and non-tariff trade costs. First, we derive the decline in UK final goods imports from the EU from industry-specific international trade elasticities, tariffs and non-tariff trade costs. Using input–output analysis, we estimate the potential output and employment effects for 56 industries and 43 countries on the national level. The absolute effects would be largest in big EU countries which have close trade relationships with the UK, such as Germany and France. However, there would also be large countries outside the EU which would be heavily affected via global value chains, such as China, for example. The relative effects (in percent of total employment) would be largest in Ireland followed by Belgium. In a second step, we split up the national effects on the NUTS-2 level for EU member states and additionally on the county (NUTS-3) level for Germany. The share of affected workers varies between 0.03% and 3.4% among European NUTS-2 regions and between 0.15% and 0.4% among German counties. A general result is that indirect effects via global value chains, i.e., trade in intermediate inputs, are more important than direct effects via final demand.
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Gemeinschaftsdiagnose: Pandemic Delays Upswing — Demography Slows Growth
Oliver Holtemöller, Stefan Kooths, Claus Michelsen, Torsten Schmidt, Timo Wollmershäuser
Wirtschaftsdienst,
May
2021
Abstract
In Germany, the first year of the coronavirus pandemic was characterised by extreme fluctuations in economic activity and a massively paralysed domestic economy. In their spring report, the leading economic research institutes assume that the current shutdown will continue and gradually be lifted from mid-May until the end of the third quarter. In the wake of the easing, private consumption in particular will recover strongly. Overall, GDP is expected to grow by 3.7 % this year and 3.9 % next year.
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