PhD Graduates Financial Markets
PhD Graduates of the Department of Financial Markets Hannes Böhm: "The Role of...
IWH-DPE Call for Applications – Fall 2022 Intake
Vacancy IWH-DPE Call for Applications – Fall 2022 Intake ...
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.
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Economic Mobility Likely to Increase Significantly after Relaxation – but also Number of COVID-19 Cases
IWH Policy Notes,
In Germany, measures to contain the coronavirus were relaxed in some areas at the beginning of March; in many places, for example, the restrictions on private and public gatherings were eased, and retail stores are increasingly able to receive customers again. The aim of these decisions is to allow for more economic mobility and personal contact between people. However, the frequency of contact is a major factor influencing the rate at which the coronavirus spreads, especially since the relaxations have so far not been accompanied by a systematic testing strategy; and vaccination progress has so far also fallen short of expectations. Estimates based on a model of the relationship between containment measures (Oxford COVID-19 Government Response Tracker, Stringency Index), economic mobility (Google Mobility Data), new corona infections, and deaths with data from 44 countries suggest that the recent relaxations increase economic mobility by ten percentage points and the number of new infections and deaths in Germany by 25%. Because both continued lockdown and relaxations have 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.
What Drives the Commodity-Sovereign Risk Dependence in Emerging Market Economies?
Journal of International Money and Finance,
Using daily data for 34 emerging markets in the period 1994–2016, we find robust evidence that higher export commodity prices are associated with lower sovereign default risk, as measured by lower EMBI spreads. The economic effect is especially pronounced for heavy commodity exporters. Examining the drivers, we find that, first, commodity dependence is higher for countries that export large volumes of commodities, whereas other portfolio characteristics like volatility or concentration are less important. Second, commodity-sovereign risk dependence increases in times of recessions and expansionary U.S. monetary policy. Third, the importance of raw material prices for sovereign financing can likely be mitigated if a country improves institutions and tax systems, attracts FDI inflows, invests in manufacturing, machinery and infrastructure, builds up reserve assets and opens capital and trade accounts. Fourth, the country’s government indebtedness or amount of received development assistance appear to be only of secondary importance for commodity dependence.
Productivity: More with Less by Better Available resources are scarce. To sustain our...
11.03.2021 • 8/2021
New wave of infections suspends economic recovery
The lockdown is being eased only slightly in Germany in March 2021, and gross domestic product (GDP) declines significantly in the first quarter of 2021. As vaccination campaigns progress and restrictions are gradually eased, a normalisation of household consumption patterns will likely boost the economy later during the year. The Halle Institute for Economic Research (IWH) forecasts that GDP will increase by 3.7% in 2021, following a decline of 4.9% in 2020. In East Germany, both the contraction and the rebound are much less pronounced.
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Disentangling Covid-19, Economic Mobility, and Containment Policy Shocks
IWH Discussion Papers,
We study the dynamic impact of Covid-19, economic mobility, and containment policy shocks. We use Bayesian panel structural vector autoregressions with daily data for 44 countries, identified through sign and zero restrictions. Incidence and mobility shocks raise cases and deaths significantly for two months. Restrictive policy shocks lower mobility immediately, cases after one week, and deaths after three weeks. Non-pharmaceutical interventions explain half of the variation in mobility, cases, and deaths worldwide. These flattened the pandemic curve, while deepening the global mobility recession. The policy tradeoff is 1 p.p. less mobility per day for 9% fewer deaths after two months.
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