08.06.2021 • 14/2021
IWH Bankruptcy Update: Still No Bankruptcy Wave in Sight; Number of Impacted Jobs Reaches New Low
In May the number of corporate bankruptcies once again fell significantly. A jump in June is also unlikely, according to early indicators assessed by IWH. The number of jobs impacted by bankruptcy has fallen to the lowest level witnessed since the Corona outbreak. The IWH Bankruptcy Report, published by the Halle Institute for Economic Research (IWH), provides a monthly update on German bankruptcy statistics.
Steffen Müller
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06.05.2021 • 13/2021
IWH Bankruptcy Update: Upward Trend in Bankruptcies Stopped; Reintroduction of Filing Requirement Unlikely to Generate Bankruptcy Wave
Following a rising trend in recent months, the number of corporate bankruptcies fell significantly in April. The number of impacted jobs also remained at modest levels. After a recent sharp rise in the bankruptcy statistics for microbusinesses (which has drawn little press attention), the upward trend for this subcategory loses steam. These are the key findings of the IWH Bankruptcy Update, which provides monthly statistics on corporate bankruptcies in Germany.
Steffen Müller
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15.04.2021 • 12/2021
Economy in East Germany shrank less than in the West, but will have weaker momentum when pandemic disappears – Implications of the Joint Economic Forecast Spring 2021 and new data for East Germany
At 3%, the increase in gross domestic product in eastern Germany in 2021 is likely to be lower than in Germany as a whole (3.7%), as the slump due to the pandemic was smaller in 2020. In the course of the economic recovery in the second half of the year, the unemployment rate is expected to fall slightly.
Oliver Holtemöller
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15.04.2021 • 11/2021
Pandemic delays upswing – Demography slows growth
In their spring report, the leading economic research institutes forecast an increase in gross domestic product of 3.7% in the current year and 3.9% in 2022. The renewed shutdown is delaying the economic recovery, but as soon as the risks of infection, particularly from vaccination, have been averted, a strong recovery will begin. The economy is likely to return to normal output levels around the start of the coming year.
Oliver Holtemöller
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Did GRW Investment Grants Contribute to the Catching-up of East Germany?
Matthias Brachert, Eva Dettmann, Lutz Schneider, Mirko Titze
Wirtschaftsdienst,
Konferenzband "30 Jahre Deutsche Einheit", März
2021
Abstract
The joint task force ‘Improving Regional Economic Structures’ (GRW) is the most important regional policy scheme in Germany and was extensively used to support the economic transformation process in the new states after reunification. The article provides an overview of national and international causal analytical studies on the effects of investment grants. The analysis shows that such programmes have positive effects on development — especially of employment and income. It not only affects the subsidised establishment benefit from this type of support, but the regions as a whole. Even though the studies do not go back to the early 1990s, we can conclude that the GRW contributed to economic development in East Germany — and to the catching-up process.
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The East-West-German Productivity Gap: Lessons from Firm-level Data?
Steffen Müller
Wirtschaftsdienst,
Konferenzband "30 Jahre Deutsche Einheit", März
2021
Abstract
According to national accounts, the East German economy is at only 80 % of West German labour productivity even 30 years after the fall of the Iron Curtain. This difference in aggregate labour productivity goes hand in hand with many of the economic and societal problems East Germany faces today. To understand the sources of the aggregate productivity gap, this study discusses recent literature on the East-West gap that applies granular firm and product level data. The evidence clearly shows the relevance of firm-level productivity differences for the aggregate gap and challenges common hypotheses derived from aggregate data.
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30 Years after Reunification, Gross Domestic Product has Served its Purpose as an Indicator
Oliver Holtemöller
Wirtschaftsdienst,
Konferenzband "30 Jahre Deutsche Einheit", März
2021
Abstract
The comparison of living conditions in East and West Germany is often based on the gross domestic product per inhabitant. However, this measure is not a good welfare indicator in itself. It can be assumed that, measured by the gross domestic product per inhabitant, there will be no further significant equalisation of economic power in East and West Germany in the foreseeable future. This is because the age structure of East Germany, i.e. the ratio of employed persons to inhabitants, is less favourable than in the West. On the other hand, if one looks at important welfare indicators such as consumption opportunities, life expectancy, leisure time and income inequality, living conditions in East and West Germany are more similar than the gross domestic product per inhabitant suggests. In the debates on the catching-up process of East Germany, more emphasis should therefore be placed on labour productivity as a measure of economic strength and on welfare indicators as a measure of the equalisation of living conditions.
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08.04.2021 • 10/2021
IWH Bankruptcy Update: Bankruptcy Statistics Rise Again in March
The number of firms declaring bankruptcy in Germany increased once again in March. However, the number of jobs impacted by the bankruptcy of large firms remained constant. The IWH Bankruptcy Report, published by the Halle Institute for Economic Research (IWH), provides a monthly update on German bankruptcy statistics.
Steffen Müller
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Finance-Growth Nexus and Banking Efficiency: The Impact of Microfinance Institutions
Afsheen Abrar, Iftekhar Hasan, Rezaul Kabir
Journal of Economics and Business,
March-April
2021
Abstract
This paper investigates the relative importance of microfinance institutions (MFIs) at both the macro (financial development, economic growth, income inequality, and poverty) and micro levels (efficiency of traditional commercial banks). We observe a significant impact on most of the fronts. MFIs’ participation increases overall savings (total bank deposits) and credit allocation (loans to private sector) in the economy. Their involvement enhances economic welfare by reducing income inequality and poverty. Additionally, their active presence helps to discipline the traditional commercial banks by subjecting them to more competition triggering higher efficiency.
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18.03.2021 • 9/2021
Economic mobility likely to increase significantly after relaxation – but also number of COVID-19 cases
The relaxation of Corona containment measures from the beginning of March 2021 lead to a significant increase in economic mobility and thus also in personal contacts in Germany. Estimates suggest that the recent relaxations increase economic mobility by more than ten percentage points and the number of new infections and deaths in Germany by 25%. Because both continued lockdowns and relaxations carry significant negative consequences, it is even more important to enable further relaxations through better testing and quarantine strategies and by increasing the pace of vaccination without putting people's health at risk.
Oliver Holtemöller
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