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Headwinds from Germany and abroad: institutes revise forecast significantly downwards According to Germany’s five...
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Professor in Finance and Labor in conjunction with a position as Senior Research Advisor at the Department of Laws, Regulations and Factor Market
Vacancy Professor in Finance and Labor in conjunction with a...
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The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the...
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When there were almost no flats in Halle yet ... Brigitte Loose about IWH's...
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26.01.2022 • 2/2022
Investment, output gap, and public finances in the medium term: Implications of the Second Supplementary Budget 2021
With the Second Supplementary Budget 2021, the German government plans to allocate a reserve of 60 billion euros to the Energy and Climate Fund. This additional spending is also meant to reduce the macroeconomic follow-up costs of the pandemic. According to the IWH’s medium-term projection, the expenditure is expected to increase output by about 0.5% at the peak of its impact in 2024. “While this macroeconomic effect is welcome, the additional investment will by no means compensate for the lack of investment activity since the beginning of the pandemic,” says Oliver Holtemöller, head of the Department Macroeconomics and vice president at Halle Institute for Economic Research (IWH). Moreover, the supplementary budget is likely to reduce confidence in the reliability of the debt brake.
Oliver Holtemöller
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