09.07.2019 • 17/2019
IWH rated "very good" and recommended for further funding
The Halle Institute for Economic Research (IWH) – Member of the Leibniz Association has been providing remarkable research and policy advice services for many years and should therefore continue to receive joint basic funding by Federal government and the Länder in future. This was the conclusion of today's meeting of the Senate of the Leibniz Association. At the end of the evaluation, the Institute was rated "very good" in all areas.
Reint E. Gropp
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01.04.2019 • 8/2019
Bank profitability increases after eliminating consolidation barriers
When two banks merge because political consolidation barriers are abolished, the combined entity is considerably more profitable and useful to the real economy. This is the headline result of an analysis of compulsory savings banks mergers carried out by the Halle Institute for Economic Research (IWH). The study yields important insights for the German and the European banking market.
Michael Koetter
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07.03.2019 • 7/2019
German economy will pick up speed only slowly
In winter of 2018/2019, the global economy weakened considerably, mainly due to economic policy risks. In Germany, the economy will pick up speed only slowly. According to IWH spring economic forecast, gross domestic product will increase by 0.5% in 2019. Growth in East Germany will amount to 0.7%.
Oliver Holtemöller
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11.02.2019 • 3/2019
No-deal Brexit would hit the German labour market particularly hard
The United Kingdom leaving the European Union without a deal would have consequences for international trade and labour markets in many countries, including outside Europe. Calculations by the Halle Institute for Economic Research (IWH) indicate: More than 600,000 jobs may be affected worldwide, but nowhere as many as in Germany.
Oliver Holtemöller
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18.12.2018 • 22/2018
IWH leads large scale EU research project on productivity
Is productivity growth slowing in industrialised countries? And if so, why? From the start of 2019, the Halle Institute for Economic Research (IWH) will be addressing these questions as the coordinator of a new EU project. Economists and statistics experts from nine European partners will collaborate on the three-year project, entitled MICROPROD. With a total budget of just under three million euros, it is the IWH’s largest EU project to date.
Steffen Müller
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14.06.2018 • 14/2018
Current economic outlook: German upswing is slowing down
In summer 2018, the world economy is still rather strong. Dynamics in the euro area, however, have declined markedly, and the cyclical upswing in Germany has almost stalled, due to weaker exports. “Gross domestic product will, according to this forecast, expand by 1.7% in 2018 and by 1.6% in 2019. Growth in East Germany will be about as strong as in Germany as a whole”, says Oliver Holtemöller, head of the Department Macroeconomics and vice president at IWH.
Oliver Holtemöller
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12.04.2017 • 19/2017
Joint Economic Forecast Spring 2017: Upturn in Germany strengthens in spite of global economic risks
The German economy is already in the fifth year of a moderate upturn. According to the Gemeinschaftsdiagnose (GD, joint economic forecast) that was prepared by Germany’s five leading economic research institutes on behalf of the Federal Government, capacity utilization is gradually increasing, and aggregate production capacities are now likely to have slightly exceeded their normal utilisation levels. However, cyclical dynamics remain low compared to earlier periods of recoveries, as consumption expenditures, which do not exhibit strong fluctuations, have been the main driving force so far. In addition, net migration increases potential output, counteracting a stronger capacity tightening. “Gross domestic product (GDP) is expected to expand by 1.5% (1.8% adjusted for calendar effects) and 1.8% in the next year. Unemployment is expected to fall to 6.1% in 2016, to 5.7% in 2017 and 5.4% in 2018”, says Oliver Holtemöller, Head of the Department Macroeconomics and vice president of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association. Inflation is expected to increase markedly over the forecast horizon. After an increase in consumer prices of only 0.5% in 2016, the inflation rate is expected to rise to 1.8% in 2017 and 1.7% in 2018. The public budget surplus will reduce only modestly. Public finances are slightly stimulating economic activity in the current year and are cyclically neutral in the year ahead.
Oliver Holtemöller
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11.04.2017 • 18/2017
The state as a pioneering customer: How public demand can drive private innovation
Especially in technology-intensive industries, demand from the state can expand private markets and create incentives for privately funded research and development, a new study by the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association shows.
Viktor Slavtchev
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04.01.2017 • 2/2017
Worse ratings by U.S. rating agencies for European sovereigns no argument for European rating agency
A new study by the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association shows that the major U.S. rating agencies rated European sovereigns significantly worse than Fitch, which is more “Europe oriented”. Although the findings in part support the claim of some European politicians during the recent debt crisis that there was an “anti-Europe” bias of the U.S. agencies, the study shows that a new European agency would not address this problem. The reason: Market participants would not listen to the new agency.
Reint E. Gropp
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State Aid and Guarantees in Europe
Reint E. Gropp, Lena Tonzer
T. Beck, B. Casu (eds): The Palgrave Handbook of European Banking, London,
2016
Abstract
During the recent financial crisis, governments massively intervened in the banking sector by providing liquidity assistance and capital support to banks in distress. This helped stabilize the financial system in the short run. However, public bailouts also bear the risk of longer-term distortions, for example, by affecting bailout expectations of banks. In this chapter, the authors first provide an overview of state aid interventions during the recent crisis episode. The third section then analyzes the effects of state aid on financial stability from a theoretical view. This is followed by the description of results obtained from empirical studies. The link between the provision of state aid and politics is discussed in the section “Institutional Design and Policy Implications”. Finally, in the section “The European Banking Union” the authors describe the elements of the European Banking Union meant to resolve and restructure banks in distress and to lower the need for public intervention. Based on the preceding analysis, conclusions are drawn regarding the new design.
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