Germany 2004: Only a transitory economic stimulus from moving tax cuts forward
Wirtschaft im Wandel,
No. 9,
2003
Abstract
In summer 2003 the German economy once again did not overcome the stagnation, which by now lasted three years. Only by the end of this year the German economy will begin to receive stronger support from a then further improved world economy. In the past months both US and European monetary policy have provided sufficient liquidity by lowering interest rates. In the USA, additional support is provided by fiscal policy; tax reductions and rebates increase domestic demand. Overall, Gross Domestic Product in the US will increase by 2.1% this year; in the euro area GDP will merely expand by a modest 0.8%. For Germany one of its key sectors will not be able to lift the economy as usual and GDP, when compared to last year, will only stagnate. Provided by the brought forward tax reform 2000 the coming year will begin with a stimulus to the German economy. The tax reductions, though, will have limited effect on aggregate production, as the increased consumption will not be able to stimulate investment. Accounting for calendar effects GDP in Germany will increase by at least 1% in 2004 compared with this year, but due to several additional working days in 2004, the unadjusted rate of expansion will be 1.7%. No substantial improvements are expected for the job market.
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IWH early warning indicators for financial crises in Central and Eastern Europe: Risk potential remains low
Ibolya Mile
Wirtschaft im Wandel,
No. 8,
2003
Abstract
Die aktuelle Analyse der Frühwarnindikatoren des IWH signalisiert ein weiterhin geringes Risiko für den Ausbruch von Finanzkrisen in den mittel- und osteuropäischen Beitrittsländern. Die Berechnungen bestätigen die positiven Erwartungen über die Stabilität der Finanzmärkte in dieser Region, die sich bereits in der vorangegangenen Untersuchung angedeutet hatten. Doch in einigen Bereichen, wie auf dem fiskalischen Gebiet, besteht für die Mehrzahl der Länder weiterhin wirtschaftspolitischer Handlungsbedarf. Im März 2003 hat auch Kroatien einen Beitrittsantrag an die Europäische Kommission gestellt. Deshalb wurde Kroatien erstmalig mit in die Untersuchungen des IWH zur Bestimmung von Risikopotenzialen für Finanzkrisen einbezogen. Die Frühwarnindikatoren zeigen hier ein ähnliches Muster wie das der anderen mittel- und osteuropäischen Staaten.
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Economic outlook for the Euro area 2003
Christian Dreger, Axel Lindner, Udo Ludwig, Klaus Weyerstraß
Wirtschaft im Wandel,
No. 7,
2003
Abstract
This article reports the spring forecast of the economic development in the Eurozone, which was carried out within the European Forecasting Network. A modest rise in GDP growth from 1.2% in 2003 up to 2.1% in 2004 is expected. The current weakness in the growth experience is caused by structural factors to a large extent. In particular, labor markets are not flexible enough in most countries.
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Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Frühjahr 2003
Wirtschaft im Wandel,
No. 5,
2003
Abstract
The global economy is in the midst of a phase of weakness. In the course of next year, at the earliest, GDP will in many regions expand a little faster than potential output. The German economy, even, remains in a phase of prolonged weakness. In the second half of this year an economic recovery is expected to start here. However, it will proceed only slowly. Aggregate capacity utilisation will continue to decline, and the state of the labour market will deteriorate further. Although the recovery will firm next year and domestic demand will rise slightly, economic growth in Germany will continue to lack dynamism.
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Current economic situation: German economy continues to stagnate
Wirtschaft im Wandel,
No. 4,
2003
Abstract
This forecast updates the IWH Economic Outlook 2003. Amid the threatening war with Iraq, the sharply increased oil prices and the continued Euro appreciation, the economic forecast for Germany is lowered. Gross domestic product is will rise by 0.8% in 2003 and by 2.1% in the following year. Due to the weak economy, the downward pressure on employment continues to increase. Unemployment in 2003 and 2004 will clearly surpass the 4 million mark.
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Fallen risk potential for financial crises and improved perspectives for 2003/2004 in Central and Eastern Europe
Martina Kämpfe, Ibolya Mile
Wirtschaft im Wandel,
No. 4,
2003
Abstract
Die aktuellen Berechnungen der Frühwarnindikatorenanalyse ergaben eine Verringerung des Risikopotenzials für Finanzkrisen für alle Volkswirtschaften Mittel- und Osteuropas mit Ausname von Ungarn. Hier hat sich der Konflikt zwischen einer expansiven Fiskalpolitik und einer restriktiven Geldpolitik zuletzt zugespitzt. Die Zunahme des Bruttoinlandsprodukts schwächte sich 2002 ab, lag aber mit Ausnahme von Polen und Tschechien bei über 3%. Dieser Anstieg wurde vorrangig von der Binnennachfrage und weniger vom Export getragen. Im Rahmen der Binnennachfrage nahm der private Konsum durchgängig zu, während der öffentliche Konsum und die Investitionstätigkeit eher uneinheitlich in der Region ausfielen. Für das Jahr 2003 ist insgesamt mit einer leichten Verstärkung des BIP-Zuwachses auf 3,4% in Mitteleuropa und dem Baltikum und 3,7% in Russland zu rechnen. Die Inflation wird sich im laufenden Jahr wegen des Ölpreisanstiegs in den meisten Ländern wieder etwas beschleunigen, im Jahr 2004 dagegen sinken. Im Jahr 2004 wird das Wirtschaftswachstum weiter zunehmen.
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Composite Leading Indicators der amerikanischen Wirtschaft - Prognosegüte des Conference Board und des OECD Ansatzes im Vergleich
Marian Berneburg
IWH Discussion Papers,
No. 172,
2003
Abstract
The Paper analyses both the Conference Board as well as the OECD Leading Indicators concerning their forecasting properties of overall economic activity. For this purpose the two indicators are introduced separately and several in-sample and out-of-sample tests are being conducted. The main focus, apart from other methods, is being laid on coherence tests as well as the Diebold/Mariano test. In contrast to many other analyses dealing with this topic, the chosen reference series is not industrial production, but rather the coincident index, as reported by the conference board. It seems as if both indicators show some sign of correlation to overall economic activity, but at the same time fail to improve on the forecasts of a simple time series model.
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IWH Economic Outlook 2003: Waiting for the Upswing in Germany - Waiting for Godot?
Wirtschaft im Wandel,
No. 1,
2003
Abstract
The outlook forecasts the economic developments in the world, the Euro Area and Germany in 2003. A general tendency is given for 2004. The world economy and the US-economy are recovering in 2003 and so are providing positive impulses for the Euro Area. For Germany this impetus from abroad will most likely remain the sole driving force for the revival of economic activity in 2003. Still this external stimulus will not be able to develop its full strength, as the newly restrictive fiscal policy will lower disposable income. At the earliest the economic upturn will gain strength in the summer months. This results in an initially increased burden on the labour market and only in 2004 will a decline in unemployment be observable, albeit at a slow pace. In economic terms, the recent interest rate cut by the ECB should only be able to show modest effects. Fiscal Policy in 2003 will be distinctly restrictive.
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The international and German economic situation in autumn 2002
Wirtschaft im Wandel,
No. 14,
2002
Abstract
The world economy is currently fragile. The prospects are dampened both, by the current crisis in Iraq, leading to a rising oil price, and the sharp drop of equity prices. Since last spring, the economic expansion in the United States has lost momentum. Also in Asia, the previously buoyant output growth has decelerated again. The Euro Area is recovering from the slowdown of last year; the pace of the recovery, however, is very modest. Finally, in Japan GDP expanded only gradually.
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Business cycle news: Upswing in Germany delayed
Wirtschaft im Wandel,
No. 12,
2002
Abstract
In the wake of the most recent national accounts estimates, the IWH has reassessed its business cycle forecast. Additionally, the economic effects of the flood were analysed. While the latter should have neither a positive nor a negative impact on Germany’ business cycle as a whole, East Germany’s already weak economic expansion is seriously affected. At most GDP will stagnate. In contrast, next year the public and private restoration efforts will stimulate the Eastern German economy.
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