Bank Credit Standards, Demand, Pro-cyclicality and the Business Cycle: A Comment
Á. Maddaloni, J. L. Peydró Alcalde, J. Suárez, Reint E. Gropp
Moneda y crédito,
No. 230,
2010
Abstract
We analyze the determinants fo standards and demand for loans to firms and house-holds over the last business cycle using the comprehensive and confidential Bank Lending Survery from the Euro area. There is significant variation of standards and demand over the cycle. Standards for business loans vary more during the business cycle than the lending standards for households, whereas credit demand from households varies more than demand from firms. Lending standards vary mainly due to charges in perception of borrower risk, bank balance sheet positions and competitive pressures. In particular, we find that higher GDP growth softens lending standards for all loans, i. e. lending standards are pro-cyclical. However, we also find pro-cyclicality in credit demand.
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Warum exportiert der Osten so wenig? Eine empirische Analyse der Exportaktivitäten deutscher Bundesländer
Götz Zeddies
AStA - Wirtschafts- und Sozialstatistisches Archiv,
No. 4,
2009
Abstract
In the aftermath of re-unification, East German exports declined around 70% due to the breakdown of COMECON trade. Although since the mid-1990s export growth rates of the New Federal States were higher than those of their West German counterparts, export performance of East German States measured by the share of exports in GDP is still comparatively poor. Whereas for a long time the low export performance of East German producers was ascribed to competitive disadvantages, in the meantime structural deficits on the micro and/or macro level are often considered as the main reason. Using bilateral trade data of German Federal States, the present paper shows on the basis of an orthodox gravity model of trade that East German exports are explicitly lower than predicted by the model. But if the gravity model is augmented by additional variables representing structural differences between Federal States, the latter explain almost entirely the lower export performance of Eastern Germany. Thus, especially the smaller firm sizes and the lower shares of manufacturing industries in gross value added are identified as important explanatory factors of the comparatively weak export performance of the New German States.
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East German Exports: Remarkable Catch-up, but Still Lagging Behind
Götz Zeddies
Wirtschaft im Wandel,
20 Jahre Deutsche Einheit - Teil 1 -
2009
Abstract
German reunification entailed severe adjustment processes in East German export industries. With political and economic transition in Eastern Europe, at that time the main export market for East German producers, export demand initially collapsed in the early 1990s. Additionally, the introduction of the Deutschmark in Eastern Germany amounted to a massive revaluation, and international competitiveness of East German producers deteriorated. However, manufacturers in the New Federal States opened up new markets, especially in Western Europe and the Americas. As a consequence, after the downturn of construction activity and investment in the mid-1990s, international trade became the driving force of GDP-growth in Eastern Germany. Although since then, goods exports of the New Federal States grew twice as much as those of Western Germany, export ratio (goods exports as a percentage of GDP) only amounts to 22 per cent in Eastern Germany, compared to 42 per cent in the western part of the country. Even in comparison to Eastern European countries in transition, openness to trade of the New Federal States is still comparatively low. As an empirical analysis shows, this must be largely traced back to smaller firm sizes in the New Federal States as well as to the lower importance of manufacturing industries, which are traditionally more export-oriented. Moreover, East German manufacturers largely specialized on intermediate inputs, which are supplied to final assembly lines in Western Germany, but are not recorded as exports. Thereby, East German export performance is considerably underestimated.
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German Economy on the Brink of Recession
Wirtschaft im Wandel,
2. Sonderausgabe
2008
Abstract
In autumn 2008, the word economy is in a downswing, caused by the commodity and energy price hike of the first half of the year, housing crises in the US and some other important countries, and in particular by the financial crisis that has recently intensified. The downswing will continue this year and for some time during 2009, and will only come to an end later next year if governments and central banks succeed in stabilizing financial markets in the coming months. In this case, lower prices of commodities and still high growth dynamics in important emerging markets countries will lead to a tentative revival of the world economy.
The German economy is on the brink of a recession. It is particularly vulnerable to a global downswing because exports of investment goods are of upmost importance for the overall economy. Because the uncertainty about the worldwide effects of the financial crisis is very high, the forecast is split. A more probable scenario is based on the assumption of a stabilizing world economy. In this scenario, the growth rate of the German economy in 2009 is 0.2%. The second scenario is based on the assumption of a worldwide recession next year and forecasts that German GDP will shrink by 0.8% in 2009.
Concerning policy, the institutes recommend a strengthening of the capital base of banks via injection of government money. This should be done in a way that gives incentives to banks for attracting additional capital from private sources.
A special chapter of the report analyzes the nature and causes of the price hikes of energy and commodities in the first half of 2008.
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Russia: Ongoing Strong Economic Growth Overshadowed by High Inflation
Martina Kämpfe
Wirtschaft im Wandel,
No. 6,
2008
Abstract
Russian economic growth in 2007 again was driven by strong private consumption and investment, grew by double-digit rates. The roles of budget expenditures and borrowing of private and state-owned firms from abroad in financing investments increased rapidly. Russian inflation climbed again; it was driven up by increases in food prices in line with rising food prices around the world. Inflation pressures had sharpened through more budget spending and scheduled rate increases for electricity and gas as well as for regulated prices for municipal services. Broad money supply (M2) rose rapidly because of strong foreign currency inflows, too. Central bank seeks to bring inflation under control by tightening monetary policy this year. That will somewhat dampen economic growth, but nevertheless GDP growth in the near future will remain at high levels.
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Economic Upswing and Vitalization of the Labor Market – Who Gains From the Upswing?
Herbert S. Buscher
Wirtschaft im Wandel,
No. 5,
2008
Abstract
The current situation with respect to the economic development in Germany may be characterized as somewhat suppressed as opposed to euphoric. And this statement holds although the German economy is in an upswing phase since 2005, and the GDP growth rates clearly exceed 2% per annum. The main driving forces of this upswing are mainly from the German exports as well as the domestic investment decisions. Rather underdeveloped compared with the exports and the investment is private consumption. This development is accompanied by positive signals from the German labor market. Declining unemployment figures, increasing regular employment and a smaller number of people in active labor market policy measures are the accompanying positive signals from the labor market. But this in general positive development has not yet reached widespread groups of employees in the sense that their real income has also risen and they thus can dispose of a higher amount of purchasing power. This time lag in the different developments between employment and income may lead to a situation that perceived and actual developments may differ and that actually, there might be a gap between the two. The paper discusses what could be meant with „perceived” development and reaches to the conclusion that actual and perceived developments are not so far away from each other than one might have expected.
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