Außenhandel als Wachstumsmotor für Ostdeutschland
Götz Zeddies, Renate Ohr
Wirtschaftsdienst,
No. 9,
2007
Abstract
Whereas in the first years after reunification, GDP growth in Eastern Germany was considerably higher than in the Western part of the country, the catching-up of the newly formed German states slowed down since the end of the 1990s. But this was primarily caused by the development of domestic demand, whilst exports grew considerably. By means of an empirical model, the article reveals future export potentials of the New Laender and arrives at the conclusion that international trade might continue to stimulate GDP growth in Eastern Germany.
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Long-Term Growth Projections for Eastern Germany
Udo Ludwig
Wirtschaft im Wandel,
No. 6,
2007
Abstract
Recent research comes to the conclusion that the eastern part of Germany not only heavily de-pends on its western counterpart, but that it essentially is dying a slow death. Arguments for this point of view reach from deindustrialisation and the lack of Headquarters of national and international Corporations to the rapidly aging society.
The study at hand assumes that economic development in a specific region does not only de-pend on the quantity and quality of its factors of production, but also on the overall conditions in the national economy a region is connected to. The analysis uses a framework in which the regional production factors are limited to the population and its development. Just as produc-tion, output is restricted to the value added of the region. Since data is only available for the ten years between 1995 - 2005, a panel econometric approach was chosen. For this purpose, the 97 spatial planning regions of Germany (Raumordnungsregionen) were divided into four groups according to their economic growth; slightly surprising, nine regions from Central Germany and Brandenburg fall into the top two groups.
The estimation results show that both economic growth in Germany as a whole as well as increases in the regional number of inhabitants positively influence regional value added. Fur-thermore, the impact of national growth is largest in the group with the highest regional value added and lowest in the group with the smallest regional output. On the other hand, lagged values of regional growth have the greatest impact in the low growth group and the smallest impact in the high growth group.
The main result of the study is that regional economic growth will not necessarily stop when the population is shrinking. After 2020, though, the growth rates of the gross domestic prod-uct will decrease. At the same time, the growth disparities between the different regions will not decline, a process aided by the demographic developments in Germany.
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Demographic development and its economic consequences
Joachim Ragnitz, Lutz Schneider
Wirtschaft im Wandel,
No. 6,
2007
Abstract
Within the next decades, East Germany will continue to face strong demographic challenges. In addition to shrinking, the ageing of population and labour force will more and more affect the economic development of the new Länder. Against this background, the question rises whether the shift of workforce age structure will influence growth and innovation potential as well as structural change. The IWH recently has focused on this topic widely ignored by the research literature so far. On the basis of selected methods and data, the economic impact of workforce ageing was empirically evaluated. The first issue concerns the impact of age on productivity. Based on two separate empirical investigations, the conclusion can be drawn that above a certain stage, age diminishes productivity. But higher levels of experience might partly compensate for this reduction. Secondly, the innovation effects of ageing have been analyzed. Again, significant age effects arise. Employees at the age of about 40 years turn out to be the most innovative part of the workforce. Furthermore, the analysis shows that engineers are particularly subject to age effects. A third study sheds light on the challenging consequences of ageing on entrepreneurship potential. Hence, independently of the increasing problem of skill shortages, ageing itself will unfavourably affect growth, innovation and structural change. Though political options are limited due to the more or less fixed demographic trends, appropriate instruments regarding economic, family and education policy might lower the identified age effects.
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Systematic Mispricing in European Equity Prices?
Marian Berneburg
IWH Discussion Papers,
No. 6,
2007
Abstract
One empirical argument that has been around for some time and that clearly contra- dicts equity market efficiency is that market prices seem too volatile to be optimal estimates of the present value of future discounted cash flows. Based on this, it is deduced that systematic pricing errors occur in equity markets which hence can not be efficient in the Effcient Market Hypothesis sense. The paper tries to show that this so-called excess volatility is to a large extend the result of the underlying assumptions, which are being employed to estimate the present value of cash flows. Using monthly data for three investment style indices from an integrated European Equity market, all usual assumptions are dropped. This is achieved by employing the Gordon Growth Model and using an estimation process for the dividend growth rate that was suggested by Barsky and De Long. In extension to Barsky and De Long, the discount rate is not assumed at some arbitrary level, but it is estimated from the data. In this manner, the empirical results do not rely on the prerequisites of sta- tionary dividends, constant dividend growth rates as well as non-variable discount rates. It is shown that indeed volatility declines considerably, but is not eliminated. Furthermore, it can be seen that the resulting discount factors for the three in- vestment style indices can not be considered equal, which, on a risk-adjusted basis, indicates performance differences in the investment strategies and hence stands in contradiction to an efficient market. Finally, the estimated discount rates under- went a plausibility check, by comparing their general movement to a market based interest rate. Besides the most recent data, the estimated discount rates match the movements of market interest rates fairly well.
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Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Frühjahr 2007
Wirtschaft im Wandel,
1. Sonderausgabe
2007
Abstract
In spring 2007, the global economy remains robust. While growth rates have declined slightly from last year, as business activity in the US has slowed, they continue to reflect an upswing, which by now has held on for a notably long time. Especially the developing and emerging countries have been raising output very fast, due in part to their increasing role in the international division of labour. In the industrialised economies, on the other hand, the current recovery has not been remarkably strong. So far the slowdown in the US economy has not spilled over to other regions and the Euro Area as well as Japan continue to expand at a high pace. Here expansive monetary policy provided a notable support. Buoyant financial markets stimulated the world economy additionally, even though market volatility has increased since the end of February. The US central bank’s current concern with inflationary risks keeps it from loosening its slightly restrictive monetary policy. It will be the second half of the year – when price pressures have eased – until the Fed makes its first rate cut. The ECB, on the other hand, has been preparing financial markets for a further increase in interest rates by summer. In 2007 and 2008 the growth disparities in the industrialised countries will diminish. On one hand, the upswing in the Euro Area will start to moderate, as fiscal policy hampers business activity and monetary policy will not stimulate anymore. On the other hand, the US economy will slowly gain pace from summer onwards; the emerging markets will continue to develop in a highly dynamic fashion. World-GDP in this and next year will likely rise by about 3 ¼ % in 2007, which is still faster than in the average of the last ten years. World trade will rise by 7 ½ % in the coming two years. An oil price of 65 US-Dollar and an exchange rate between the Euro and the US-Dollar of 1.32 were assumed for both years 2007 and 2008. The real estate market in the USA continues to be a risk for...
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Alterung und technologisches Innovationspotential : Eine Linked-Employer-Employee-Analyse
Lutz Schneider
IWH Discussion Papers,
No. 2,
2007
Abstract
Growth in advanced economies is essentially driven by innovation activities. From a demographic point of view the question rises, whether the trend of an ageing workforce will affect the innovation capacities of these economies. To answer this question, the paper examines on the basis of a German linked-employer-employee-dataset, whether an older workforce lowers a firm’s potential to generate product innovations. The empirical approach is based on an Ordered-logit regression model, relating a firm’s innovation potential to the age composition of its employees. The analysis provides evidence of significant age effects. The estimated age-innovation-profile follows an inverted-ushaped pattern, it peaks at the age of about 40 years. A separate estimation shows, that the technician’s and engineer’s age seems to be particularly relevant.
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Repercusiones de la integración y consolidación de los sectores bancarios europeos sobre la innovación y las actividades de los emprendedores
Hans Degryse, Steven Ongena, Maria Fabiana Penas
Papeles de Economía Española,
No. 110,
2006
Abstract
We investigate whether the agenda of deepening the integration of the European financial sector may hurt innovation and growth in Europe. In particular we highlight the problems financial integration may create for breakthrough innovation. Financial integration, by escalating competition and consolidation in the European banking sector, may jeopardize the funding of radical innovators. However weighing the current evidence we conclude these problems may at most be transitory.
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Threshold for employment and unemployment. A spatial analysis of German RLM's 1992-2000
Christian Dreger, Reinhold Kosfeld
External Publications,
2006
Abstract
Changes in production and employment are closely related over the course of the business cycle. However, as exemplified by the laws of Verdoorn (1949, 1993) and Okun (1962, 1970), thresholds seem to be present in the relationship. Due to capacity reserves of the firms, output growth must exceed certain levels for the creation of new jobs or a fall in the unemployment rate. While Verdoorn's law focuses on the growth rate of output sufficient for an increase in employment, in Okun's law, the fall in the unemployment rate becomes the focus of attention. In order to assess the future development of employment and unemployment, these thresholds have to be taken into account. They serve as important guidelines for policymakers. In contrast to previous studies, we present joint estimates for both the employment and unemployment threshold. Due to demographic patterns and institutional settings on the labour market, the two thresholds can differ, implying that minimum output growth needed for a rise in employment may not be sufficient for a simultaneous drop in the unemployment rate. Second, regional information is considered to a large extent. In particular, the analysis is carried out using a sample of 180 German regional labour markets, see Eckey (2001). Since the cross-sections are separated by the flows of job commuters, they correspond to travel-to-work areas. Labour mobility is high within a market, but low among the entities. As the sectoral decomposition of economic activities varies across the regions, the thresholds are founded on a heterogeneous experience, leading to more reliable estimates.The contribution to the literature is twofold. First, to the best of our knowledge, no previous paper has investigated a similar broad regional dataset for the German economy as a whole before. By using a panel dataset, information on the regional distributions around the regression lines as well as theirs positional changes is provided for each year. Second, the methods applied are of new type. They involve a mixture of pooled and spatial econometric techniques. Dependencies across the regions may result from common or idiosyncratic (region specific) shocks. In particular, the eigenfunction decomposition approach suggested by Griffith (1996, 2000) is used to identify spatial and non-spatial components in regression analysis. As the spatial pattern may vary over time, inference is conducted on the base of a spatial SUR model. Due to this setting, efficient estimates of the thresholds are obtained. With the aid of a geographic information system (GIS) variation of the spatial components can be made transparent. With Verdoorn’s and Okun’s law the figures show some significant patterns become obvious over time. In respect to Verdoorn’s law, for instance, a stripe of high values in the north-western part from Schleswig-Holstein via Lower Saxony and North Rhine Westfalia to Rhineland Palatinate is striking in all years but 1994 and 1995. In most periods the spatial component is likewise concentrated in Saxony. Clusters of low values can be found in northern Bavaria and, in some periods, in Thüringen and Mecklenburg-Vorpommern. Other parts of Germany appear to be more fragmented consisting of relative small clusters of low, medium and high values of the spatial component. With Okun’s law some changing spatial patterns arise. In all, spatially filtering provides valuable insights into the spatial dimensions of the laws of Verdoorn and Okun.
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University policy confronted with important decisions: Growth opportunities of East German university towns must not be constricted. A comment.
Peter Franz
Wirtschaft im Wandel,
No. 11,
2006
Abstract
Städte, die in ihrer Stadtentwicklungspolitik auf den Faktor Wissen setzen, haben gute Argumente: Mit dem flächendeckenden Rückgang der Geburtenzahlen verbleibt für Städte der Einwohnerzuwachs durch Wanderungen als einzige demographische Wachstumschance. Gerade in ostdeutschen Städten kommt so – mangels wirtschaftlicher Dynamik des privaten Sektors – den Ausbildungseinrichtungen und insbesondere den Hochschulen die Rolle eines wichtigen Anziehungsfaktors zu. Und Hochschulstädte ziehen in der Regel Gruppen junger Menschen an. Während 1990 z. B. in Sachsen-Anhalt 10 000 Studenten eingeschrieben waren, ist mit dem erfolgten Hochschulausbau die Studentenzahl inzwischen auf über 50 000 gestiegen. Neben dem Einwohnerwachstum, das auch für die Finanzzuweisungen vom Land wichtig ist, steigen mit dem Ausbau von Hochschulen und Forschungsinstituten auch die Chancen für Kooperationen zwischen Wissenschaft und Unternehmen. Die Beschäftigung hochqualifizierter Absolventen und Ausgründungen stärken die lokalen Wachstumskräfte.
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Interregional equalization policy in focus: Donor regions and beneficiary regions and their economic performance
Gerhard Heimpold, Peter Franz
Wirtschaft im Wandel,
No. 11,
2006
Abstract
The future of the interregional equalization policy in Germany is discussed intensively at present. While in the past the interest of equalization policy was focussed primarily on the regions which benefit from interregional equalization policy (beneficiary regions) and the effects obtained there, recently the view is directed also toward the regions which bear the fiscal burden of the equalisation policy (donor regions). Concerning the donor regions, a fear of growth-absorbing withdrawal effects exists, which gives reason in view of declining economic growth rates on the national level to think about the future of interregional equalization policy. The IWH contributed to this debate together with two project partners by an investigation, which was accomplished on behalf of the Federal Office for Building and Regional Planning. The following findings will show the economic performance of the donor regions (exclusively West German regions) and of the beneficiary regions (all East German regions and a few West German regions) and their changing economic growth patterns. Concerning the level of economic performance, measured by means of the gross domestic product (GDP) per capita, as expected, the donor regions, consisting of West German regions, in the period 1992-2003 altogether show an above average GDP per capita. In contrast, the beneficiary regions, both the East German and (less strongly) the West German show a GDP per capita below average. Concerning the development of the economic performance, which was measured on the basis of the relative GDP per capita (GDP per capita of the region concerned in relation to the national average), the East German beneficiary regions could catch up in the first period (1992-1998) strongly. This catching up process, however, clearly slowed down in the second period 1998-2003. Like a mirror-image the lead of the donor regions regarding GDP per capita in relation to the national average became smaller. But after 1998 many West German donor regions regained their growth dynamics. Additionally the contributions of the regions to the absolute increase of the GDP in the period 1998-2003 were investigated: 30 of 271 regions have a share of around 50% in the overall GDP increase, 28 of them located in West Germany, and 21 of them donor regions. This in mind, the policy should further provide and secure favourable development conditions for those regions, which contribute at most to the increase of the overall economic performance and thus create the economic base for the interregional equalization policy.
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