Financial policy dominated by consolidation
Kristina vanDeuverden
Wirtschaft im Wandel,
No. 10,
2002
Abstract
Submitting the Stability and Growth Pact European member states committed themselves to reduce their budget deficits. In spring this year the German fiscal position worsened more and more and it became obvious that the deficit target would – again – be missed. Despite the worsened starting point Germany affirmed to follow its original stability programme and to attain a budget “close to balance” by the year 2004. Thus, consolidation will have to be strengthened and the scope for fiscal policy narrows down.
If current fiscal policy is not sustainable, the necessity of consolidation is obvious. However, the mode of consolidation is controversial. The Stability and Growth Pact focuses on converging budget deficits close to balance. For this, short-term oriented consolidation dominates the more medium and long-term oriented aspects of fiscal policy. Generating economic conditions by fiscal policy is at least restricted, maybe temporarily impossible – and shortening the consolidation period increases its costs.
A forecast of the government’s financial development in the years 2002 to 2006 shows clearly that the restructuring of revenues and expenditure will show no progress. In particular, the lack of structural reforms will burden Germany’s fiscal situation in the medium-term oriented consolidation period. However: the political self-commitment this spring leaves no scope for alternatives, but to enforce the consolidation. Despite some efforts, the projection concludes that by the year 2004 the budget will show a deficit.
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Consequences of EU enlargement for regional promotion measures in East Germany
Franz Kronthaler, Martin T. W. Rosenfeld
Wirtschaft im Wandel,
No. 9,
2002
Abstract
Consequences of EU enlargement for regional policy in East Germany EU enlargement will change the status of regions currently assisted by EU regional policy. A number of regions will probably lose their status as “Objective 1 Region” and will hence have to exist without EU regional policy funding. Furthermore it has to be assumed that the EU will additionally reduce the maximal permitted regional aid rate for investment in the same regions. Most regions in the East German Länder will be affected by these changes. A “phasing out” of such Objective 1 Regions could ease the adjustment pressures. In anticipating to the probable reduction of the regional aid rate for investment, the development of infrastructure should already today be intensified in order to alleviate locational disadvantages as far as possible.
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Transport and Economic Development, (also in French: Transport et Développement Économique)
Ulrich Blum, Leonard Dudley
Transport and Economic Development,
2002
Abstract
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Zur Entwicklung der Wirtschaft im Kreis und in der Stadt Gotha
Peter Franz
Stadtentwicklung Gotha 1990 - 2000,
2002
Abstract
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Regional effects of infrastrukture investments on the New Länder
Walter Komar, Evelyn Krolopp, Joachim Ragnitz
IWH-Sonderhefte,
No. 2,
2002
Abstract
Given infrastructure deficiencies in eastern German states and concomitant
weak growth, the present volume analyzes the extent to which making
important infrastructure projects a priority could more quickly improve
local business conditions in eastern Germany. Although the Solidarity Pact
II makes funds available for infrastructure development, these funds are
allocated over a period of twenty years. This timeframe will not allow the
rapid improvement of local business conditions.
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Investment Behaviour of Financially Constrained Multinational Corporations: Consequences for the International Transmission of Business Cycle Fluctuations
Diemo Dietrich
IWH Discussion Papers,
No. 165,
2002
Abstract
The paper investigates the investment decision of a financially constrained multinational
corporation (MNC) planning investment projects both at home and in a developing
country. The collateral values of the projects diverge because of country specific
transactions costs so that the willingness of banks to grant a loan depends not only on
the MNCs financial wealth but also on the share of FDI in total investment. It is shown
that i) variations in the MNCs financial standing affects FDI stronger than domestic
investment, ii) FDI is likely to decrease following a macroeconomic shock to the MNC
parent, and iii) domestic investment is likely to increase following a macroeconomic
shock to the MNC affiliate.
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Reconstructing the East is making headway - Progress report of economic research institutions on the economic development in East Germany - abridged version
Wirtschaft im Wandel,
No. 7,
2002
Abstract
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Was bringt die Wissenschaft für die Wirtschaft in einer Region?
Peter Franz, Martin T. W. Rosenfeld, Diana Roth
IWH Discussion Papers,
No. 163,
2002
Abstract
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Vierteljährliche Entstehungsrechnung des Bruttoinlandsprodukts für Ostdeutschland: Sektorale Bruttowertschöpfung
Hans-Ulrich Brautzsch, Udo Ludwig
IWH Discussion Papers,
No. 164,
2002
Abstract
Data regarding the development of macroeconomic production and employment are essential for the political decision process. Especially timely available information is a critical issue. Reliable short run data are not reported for East Germany yet. Because of data limitations for the past quarterly sectoral series of production and employment are derived from annual national accounts data using a set of indicators by branches. Indicators have been tested and cover working hours and sales, among others. For the period from 1992 to 2001 quarterly series for sectoral GDP are derived. A flash estimator for the overall macroeconomic performance is obtained through aggregation.
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