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Joint Economic Forecast
Joint Economic Forecast The joint economic forecast is an instrument for evaluating...
06.07.2017 • 28/2017
Politicians share responsibility for the risk of their state defaulting
Investors assume higher risks of default when a country is politically unstable or governed by a party at the left or right end of the political spectrum. However, according to findings obtained by Stefan Eichler from the Halle Institute for Economic Research (IWH), the more democratic the country is and the more it is integrated into the global economy, the lower is the impact that such political factors have.
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Do Local Banking Market Structures Matter for SME Financing and Performance? New Evidence from an Emerging Economy
Journal of Banking & Finance,
This paper investigates the relationship between local banking structures and SMEs’ access to debt and performance. Using a unique dataset on bank branch locations in Poland and firm-, county-, and bank-level data, we conclude that a strong position for local cooperative banks facilitates access to bank financing, lowers financial costs, boosts investments, and favours growth for SMEs. Moreover, counties in which cooperative banks hold a strong position are characterized by a more rapid pace of new firm creation. The opposite effects appear in the majority of cases for local banking markets dominated by foreign-owned banks. Consequently, our findings are important from a policy perspective because they show that foreign bank entry and industry consolidation may raise valid concerns for SME prospects in emerging economies.
14.12.2016 • 50/2016
The German Economy: Economic Activity Spurred by Private Consumption and Construction
German economic activity remains robust due to strong domestic demand. IWH forecasts gross domestic product (GDP) to increase by 1.3% in 2017. The growth rate is half a percentage point lower than in 2016 due to calendar effects and a negative contribution of external trade. Consumer price inflation also remains modest (1.3%). “Unemployment is expected to increase slightly due to a protracted integration of refugees into the labor market”, says Oliver Holtemöller, Head of the Department Macroeconomics and IWH vice president
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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.
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Der Euro als Triebfeder des deutschen Exports?
List Forum für Wirtschafts- und Finanzpolitik,
The excessive accumulation of debt especially in the southern member states currently challenges European Monetary Union (EMU). Whereas for a long time, preventing a break-up of EMU was indisputable, in the meantime, voices were being raised claiming a withdrawal of Greece from the currency union. Especially in Germany, a withdrawal of individual members from the currency union (or even a complete break-up of EMU) is associated with economic disadvantages. Particularly, it is argued that EMU is of greatest utility for Germany due to the countries’ longstanding wage moderation and strong export orientation. Against this background, this paper analyzes the effects of a withdrawal of individual member states from the currency union on German exports. Thereby, it is assumed that a withdrawal of those countries from EMU would be accompanied by real devaluations. As the analyses show, the impact of a withdrawal of Ireland, Greece, Spain and Portugal from the currency union on German exports would be rather small. However, since European Monetary Union as a whole is still the most important foreign market for German manufacturers, a complete break-up of EMU could noticeably weaken German export performance.