Upturn Remains Moderate — Economic Policy Lacks Growth Orientation
Roland Döhrn, Ferdinand Fichtner, Oliver Holtemöller, Timo Wollmershäuser
Wirtschaftsdienst,
No. 5,
2016
Abstract
The German economy is experiencing a moderate upturn. Gross domestic product is expected to increase by 1.6 per cent this year and by 1.5 per cent in 2017. The upturn will be driven by private consumption, which will benefit from continued employment growth, sizeable increases in wage and transfer income, and also purchasing power gains thanks to lower energy prices. Fiscal policy will also be expansively oriented, partly due to rising costs related to refugee immigration. Public budgets will still post significant surpluses in the forecasting period, however. Failing to use this room for manoeuvre to promote growth, as seen in recent years, is not a sustainable path. In view of the continuous slack in the euro area economy, the monetary policy stance is considered to be appropriate. Should it become obvious in the course of this year that production does not return to normal capacity and that the inflation rate does not move towards two per cent, further measures to stimulate growth might become necessary. The scope for further monetary policy measures has been widely exhausted, though. A further economic stabilization could only be achieved through a combination of expansionary fiscal and monetary policy. This could severely damage the credibility of monetary policy, however.
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16.12.2015 • 45/2015
German Economy: Strong domestic demand compensates for weak exports
The upturn of the German economy is expected to gain further momentum as a consequence of strong domestic demand. Real gross domestic product is expected to increase by 1.6% in 2016. Consumer prices are expected to rise by 0.9%. Unemployment is expected to rise slightly because it will take time to integrate refugees into the labour market.
Oliver Holtemöller
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An Assessment of Owner-Occupants' and Tenants' Space-heating Energy Consumption in a Regional Housing Market Context - Evidence from German Planning Regions
Marius Claudy, Claus Michelsen, Timo Zumbro
Energy Economics,
2013
Abstract
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The Effects of Building Energy Codes in Rental Housing: The German Experience
Claus Michelsen, Sebastian Rosenschon
Economics Bulletin,
No. 4,
2012
Abstract
This paper investigates the effect of building energy codes on housings' real energy consumption. We argue that building codes should have a twofold effect: lower levels of energy consumption after its implementation and decreasing energy requirements over time, because tighter building codes induce technical progress in the construction sector. We find evidence for both aspects. Based on a large and unique sample of energy certificates from Germany, this study is the first that deals with the empirical effects of energy efficiency standards in apartment/rental housing. Moreover, it is the first, which includes different stages of regulation.
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Residential Energy Markets
Claus Michelsen, Sebastian Rosenschon
Morris A. Pierce (Hrsg.), Encyclopedia of Energy Vol. 4,
2012
Abstract
The residential sector accounts for about 30 percent of overall final energy consumption worldwide. The sector includes energy use in residential buildings, mainly for space heating, cooling, water heating, lighting, appliances and cooking equipment. Per capita demand in 2005 equaled about 300 kilograms of oil equivalent (kgoe) worldwide.
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In Focus: State is Winner of Recent German Upswing
Axel Lindner
Wirtschaft im Wandel,
No. 9,
2008
Abstract
In 2006 and 2007, production expanded briskly in Germany. Real disposable incomes of private households, however, were almost stagnant. This article sheds, with help of national accounts data, some light on the reasons for this discrepancy: By far the most important factor is that the share of the general government in the disposable income of the whole economy increased strongly. The share of corporations in the disposable income increased, too. Finally, the deflator for consumption rose by more than the deflator of GDP mainly because of the price hike for imported commodities and energy.
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Business Cycle Forecast: On the Edge?
Wirtschaft im Wandel,
No. 9,
2008
Abstract
During the summer of 2008, the world economy was further slowing. The financial crisis affects the real economy by tightened credit standards in the US and in the European Union, and housing markets are now in a severe crisis not only in the US, but also in some countries in Western Europe. Finally, consumption of households is affected by stagnating real disposable incomes due to the energy price hike. The slowing world economy, however, has caused the oil price to fall since July, and most emerging markets economies are, up to now, quite resilient.
In Germany, sentiment has deteriorated significantly. Production appears to be about stagnating in the summer. During winter, the devaluation of the euro and a beginning pick up of demand since July will help producers of tradable goods in Germany. Domestic demand will be supported by lower energy prices and healthily growing wage incomes. All in all, gross domestic product (gdp) (adjusted for the number of working days) will increase by 1,8% this year and by 0,8% in 2009.
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Business Cycle Forecast, Summer 2008: Price Hikes and Financial Crisis Cloud Growth Prospects
Wirtschaft im Wandel,
No. 7,
2008
Abstract
In the summer of 2008 the turmoil on financial markets and that on the markets for energy dim the prospects for the world economy. The acceleration of the oil price hike during the first half of the year has led to an increase in expected inflation and to higher interest rates on capital markets, while stock prices are going down. At the same time, the financial crisis is far from over, and banks in the US and in Western Europe continue in their efforts to consolidate their balance sheets. Thus, the expansion of credit supply will be scarcer in the next quarters. All this means that demand will slow in the developed economies during the next quarters. However, the massive fiscal stimulus will help the US economy to stabilize, and the world economy still benefits from the high growth dynamics in the emerging markets economies. All in all, the developed economies will not reach their potential growth rate before the second half of 2009. In Germany, the upswing comes to a temporary halt during summer of this year. Slowing foreign demand and the oil price hike induce firms to postpone investments, and private consumption, the soft spot of the upswing in Germany, is still sluggish due to high inflation rates that impair purchasing power. For the end of 2008, chances are good that growth in Germany accelerates again, because German exporters are still penetrating emerging markets as competitiveness does not diminish. All in all, the German economy will grow by 2.3% in 2008 (mainly due to the very high dynamics at the beginning of the year) and by 1.3% in 2009. A main risk of this forecast is that monetary policy fails in easing the high inflationary pressures. As to fiscal policy, efforts to reach sustainable public finances should not weaken.
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Consequences of the US-subprime Crisis Dampen Economic Growth in Germany
Wirtschaft im Wandel,
1. Sonderausgabe
2008
Abstract
The crises of the housing and the financial sector in the US and the turmoil on worldwide financial markets have clouded the prospects of the world economy for this and next year. In particular, conditions for financing consumption and investment will worsen. In addition, the price hikes for energy and food entail a redistribution of purchasing power from ordinary households to the producers of these goods. As a consequence of all this, the economy in the US will be more or less stagnating this year, and world growth will slow down. Firms in the nonfinancial sector, however, are generally in good financial condition, policy in the US takes strong measures to contain the crisis, and growth dynamics in emerging markets economies appear to be robust enough to withstand the dampening effects. In Germany, the economy is, in spite of the adverse effects from abroad and in particular the strong appreciation of the euro, still in good shape. Apparently, the economy has become more robust in the past years, partly due to increased competitiveness of German producers. Still, economic expansion will slow down, with annual growth rates of 1.8% for this year and 1.4% for 2009.
For the first time the forecast of the institutes comprises a medium term projection. For this, the potential growth rate of the German Economy is estimated to be 1.6%. As to policy recommendations, the institutes advise against the establishment of minimum wages in Germany, because they fear adverse effects for employment. In this point the IWH and its partners take a different view.
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