The State of the World Economy and the German Economy in Fall of 2003 - Report of the six economic research institutes
Wirtschaft im Wandel,
No. 14,
2003
Abstract
Growth of total world output has accelerated since last spring. The factors that had dampened growth during the early months of 2003 have lapsed, economic policy continues to be stimulating and the assessment of the prospects has become more favourable. The recovery is led once again by the United States. Developments in Japan are surprisingly good and the phase of weakness in Southeast Asia has been overcome. Whereas output in the EU accession countries has continued to grow strongly, the euro area has remained mired in stagnation....
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Current economic situation: A silver lining on the horizon
Wirtschaft im Wandel,
No. 12,
2003
Abstract
The Federal Statistical Office has recently released the figures for second quarter GDP and its components. At the same time, the data for the past four years has been revised. This made it necessary to update the existing IWH-forecasts for 2003 and 2004. Stimulated by an improving world economy GDP will not decline this year but merely stagnate. In 2004 the external stimulus will further increase and accounting for the additional working days economic activity will rise by 1.8%. The turnaround at the labour market will not take place before the second half of 2004. Fiscal policy is currently aiming to balance the budget, but so far the government tried to achieve this goal by increasing levies and taxes. In order to maintain the growth potential, a sustainable consolidation, though, should work by means of cutting expenditure. Overall the deficit will be 4.1% and 3.9% of nominal GDP in this and next year, respectively.
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Opportunities and Risks for Regional Development in Former East German Brown Coal Mining Areas: The Case of the “Geiseltal” Mining Area in Saxony-Anhalt
Peter Franz
Wirtschaft im Wandel,
No. 11,
2003
Abstract
The rehabilitation of former brown coal open mining locations represents an important section of the economic and ecological restructuring process in East Germany, taking place since 1990. The recent progress in rehabilitation has led to large amounts of newly disposable space and thus expands the opportunities for regional development, especially with respect to tourism. But the possible positive effects are at risk because of diverse obstacles. In the case of the former open mining location of the “Geiseltal” in the south of Saxony-Anhalt such obstacles show up in form of a strong identification of the residents with the tradition of mining industry, in form of the expansive interests of nature protection organizations, and in form of inadequate organisational structures of the local public administration. In the case of a tourism-oriented development strategy risks arise concerning the actual duration of the remaining recultivation process and concerning the competition with locations with similar development targets.
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A Study of the Competitiveness of Regions based on a Cluster Analysis: The Example of East Germany
Franz Kronthaler
IWH Discussion Papers,
No. 179,
2003
Abstract
This paper examines whether some East German regions have already achieved the same economic capability as the regions in West Germany, so that they are on a competitive basis with the West German regions and are able to reach the same economic level in the long run. If this is not the case, it is important to know more about the reasons for the economic weakness of the East German regions twelve years after unification.
The study is based on a cluster analysis. Criteria for the cluster formation are several economic indicators, which provide information about the economic capability of regions. The choice of the indicators is based on a review of results of the theoretical and empirical literature on the new growth theory and new economic geography.
The results show that most of the East German regions have not yet reached the economic capability and competitiveness of their West German counterparts so that they - from the viewpoint of the new growth theory and the new economic geography - are not in the position to reach the same economic level. According to these theories economic disadvantages are most notably the consequences of less technical progress, a lack of entrepreneurship and fewer business concentration. Under these points it is especially noteworthy that young well educated people leave these East German regions so that human capital might will turn into a bottle-neck in the near future. Only a few regions in East Germany - those with important agglomerations - are comparable to West German regions that are characterised by average capability and competitiveness, but not to those with above average economic capability and competitiveness. Even those more advanced East German regions still suffer from a slower technical progress.
There are important policy implications based on these results: regional policy in East Germany was not able to assist raising all regions to a sufficient level of competitiveness. It may be more effective to concentrate the regional policy efforts on a selection of important agglomerations. This has also strong implications for the EU regional policy assuming that the accession countries will have similar problems in catching up to the economic level of the EU as have the East German regions.
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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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Local conditions for the New Economy in structurally weak areas: The Example of Saxony-Anhalt
Walter Komar
Wirtschaft im Wandel,
No. 9,
2003
Abstract
The paper presents the main results of an analysis of the regional conditions for the New Economy in Saxonia-Anhalt, i. e. for the sectors of modern biotechnology and modern information technology. Therefore, the regional conditions in Saxonia-Anhalt and the Raumordungsregion (ROR) Munich are compared. Latter region is one of the most advanced areas in Germany with regard to the two sectors under consideration. As expected, the ROR Munich shows better results in most aspects. Nevertheless, an important result is that even in less economically advanced regions modern biotechnology and modern information technology have chances for a good economic performance. Therfore, these regions must use better their existing potentials and eliminate their still existing regional deficits.
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Optimal Economic Policies for Slovenia with Different Sets of Policy Instruments. Dynamics of Continuous, Discrete and Impulsive Systems Series B
Klaus Weyerstraß, Reinhard Neck
Applications & Algorithms,
2003
Abstract
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The Olympic Games raise hopes for regional development policy: Economic effects of the infrastructure investments planned for the Olympic Games in 2012 in Leipzig
Peter Franz, Franz Kronthaler
Wirtschaft im Wandel,
No. 7,
2003
Abstract
Together with the cities of Chemnitz, Dresden, Halle and Riesa the East German city of Leipzig has applied as venue for the Olympic Games 2012. With its application Leipzig competed with four economically by far stronger West German cities (Stuttgart, Frankfurt, Düsseldorf, Hamburg). On April 12, 2003 the National Olympic Committee had to elect the national candidate for 2012 out of this bundle of five applying cities and nominated Leipzig. With the organization of this big event the city of Leipzig and its partner cities expect a strong impulse for regional development. This study tries to estimate the potential economic effects of the planned investment with regard to infrastructure. Important results: Regarding directly the job effects connected with the investment and development of the infrastructure about 3,500 additional jobs are to be expected for a period of ten years. The infrastructure investment planned so far for the Olympiad will contribute only partially to eliminate important infrastructural bottlenecks in the region. Nevertheless the planned infrastructure facilities would have the effect that the new ‘olympia region Leipzig’ would remain attractive also after 2012 as venue for large sport events.
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On the presence of important growth factors in German regions along the border with Poland
Gerhard Heimpold
Wirtschaft im Wandel,
No. 7,
2003
Abstract
The German regions bordering on Poland are regarded as economically weak. Prior to the EU enlargement there was great uncertainty about the economic prospects of these regions. Against this background this contribution tries to shed some light on this debate about the future of the border regions. The empirical research shows two different findings: Firstly, the border space is not a homogeneous one. Rather, certain sub-regions show strengths – for instance the university towns in terms of the availability of human capital and of service industries. Other districts are remarkable for their great share of employees in the manufacturing sector as well as for their exceptionally high industrial investment. Secondly, the border regions show an endowment with essential growth determinants which is often below East Germany as a whole. But this is the case in many other East German regions too. The East-West disparities turn out to be much more serious than the intra-East German disparities.
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Regional economic effects of hosting the Olympic Games 2012 in Leipzig and its partner towns - An analysis of infrastructure investments
Peter Franz, Franz Kronthaler
IWH-Sonderhefte,
No. 1,
2003
Abstract
Together with the cities of Chemnitz, Dresden, Halle and Riesa the East German city of Leipzig has applied as venue for the Olympic Games 2012. With its application Leipzig competed with four economically by far stronger West German cities (Stuttgart, Frankfurt, Düsseldorf, Hamburg). On April 12, 2003 the National Olympic Committee had to elect the national candidate for 2012 out of this bundle of five applying cities and nominated Leipzig. With the organization of this big event the city of Leipzig and its partner cities expect a strong impulse for regional development. This study tries to estimate the potential economic effects of the planned investment with regard to infrastructure. Important results: Regarding directly the job effects connected with the investment and development of the infrastructure about 3,500 additional jobs are to be expected for a period of ten years. The infrastructure investment planned so far for the Olympiad will contribute only partially to eliminate important infrastructural bottlenecks in the region. Nevertheless the planned infrastructure facilities would have the effect that the new ‘olympia region Leipzig’ would remain attractive also after 2012 as venue for large sport events.
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