23.04.2024 • 13/2024
Chinese mass imports strengthen extreme parties
Globalisation has led to an increase in votes for the political fringes in Europe. A study by the Halle Institute for Economic Research (IWH) is the first to show the long-term consequences of increased Chinese imports in European regions: Far-right and populist parties in particular have benefited from the so-called China shock in national elections.
Steffen Müller
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27.03.2024 • 10/2024
Joint Economic Forecast 1/2024: Headwinds from Germany and abroad: institutes revise forecast significantly downwards
According to Germany’s five leading economic research institutes, the country’s economy shows cyclical and structural weaknesses. In their spring report, they revised their GDP forecast for the current year significantly downward to 0.1%. In the recent fall report, the figure was still 1.3%. Expectations for the coming year are almost unchanged at 1.4% (previously 1.5%). However, the level of economic activity will then be over 30 billion euros lower due to the current weak phase.
Oliver Holtemöller
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Deutschland in der Stagnation festgefahren – privater Konsum weiter unter dem Niveau
von vor der Pandemie
Konjunktur aktuell,
No. 1,
2024
Abstract
Zu Beginn des Jahres 2024 zeigen Stimmungsindikatoren etwas aufgehellte Aussichten für die internationale Konjunktur. In Europa dürfte die Dynamik allerdings recht schwach bleiben. Deutschland befindet sich in einer lang anhaltenden Stagnation, die sich bis zum Sommer fortsetzen wird. Für die Zeit danach ist mit einem leichten Anziehen der Konjunktur zu rechnen. Das Bruttoinlandsprodukt dürfte im Jahr 2024 um lediglich 0,2% expandieren, für 2025 prognostiziert das IWH einen Zuwachs um 1,5%.
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12.01.2024 • 2/2024
Green transition and the debt brake: Implications of additional investment for public finances and private consumption in Germany
The German Climate Protection Act stipulates, among other things, that greenhouse gas emissions in Germany are to be reduced by 65% by 2030 compared to 1990 levels. The green investments required to achieve this target are likely to amount to around 2.5% of gross domestic product each year. According to the medium-term projection of the Halle Institute for Economic Research (IWH), the associated additional government spending on public investment and support measures cannot be financed from projected tax revenues. It is therefore to be expected that the tax burden on households will increase and private consumption will be curbed accordingly, if both the current form of the debt brake and the greenhouse gas reduction targets are maintained.
Oliver Holtemöller
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The Importance of Credit Demand for Business Cycle Dynamics
Gregor von Schweinitz
IWH Discussion Papers,
No. 21,
2023
Abstract
This paper contributes to a better understanding of the important role that credit demand plays for credit markets and aggregate macroeconomic developments as both a source and transmitter of economic shocks. I am the first to identify a structural credit demand equation together with credit supply, aggregate supply, demand and monetary policy in a Bayesian structural VAR. The model combines informative priors on structural coefficients and multiple external instruments to achieve identification. In order to improve identification of the credit demand shocks, I construct a new granular instrument from regional mortgage origination.
I find that credit demand is quite elastic with respect to contemporaneous macroeconomic conditions, while credit supply is relatively inelastic. I show that credit supply and demand shocks matter for aggregate fluctuations, albeit at different times: credit demand shocks mostly drove the boom prior to the financial crisis, while credit supply shocks were responsible during and after the crisis itself. In an out-of-sample exercise, I find that the Covid pandemic induced a large expansion of credit demand in 2020Q2, which pushed the US economy towards a sustained recovery and helped to avoid a stagflationary scenario in 2022.
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Konjunktur aktuell: Export und privater Konsum schwach – Deutschland wartet auf den Aufschwung
Konjunktur aktuell,
No. 4,
2023
Abstract
Die Weltwirtschaft verliert zum Ende des Jahres 2023 weiter an Schwung. Der durch den weltweiten Inflationsschub ausgelöste restriktive Schwenk der Geldpolitik drückt über höhere Finanzierungskosten vielerorts die Güternachfrage. Im nächsten Jahr dürfte die Weltwirtschaft wieder etwas anziehen. Die deutsche Wirtschaft ist nach Ende der Pandemie nicht wieder auf ihren alten Wachstumspfad zurückgekehrt. Das Verarbeitenden Gewerbe hat an Wettbewerbsfähigkeit eingebüßt, und die Weltnachfrage nach Industriegütern ist zurzeit schwach. Zudem ist die Inflation immer noch hoch, und die Realeinkommen sind längere Zeit über zurückgegangen. Die geldpolitische Straffung hat die Finanzierungsbedingungen verschlechtert, was besonders die Bauwirtschaft belastet. Das Bruttoinlandsprodukt wird 2023 wohl um 0,3% sinken und im kommenden Jahr um 0,5% expandieren.
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Microdata for Economic Research in Europe: Challenges and Proposals
Eric Bartelsman, Marco Matani, Filippo di Mauro, Sergio Inferrera, Ugo Panizza, Michael Polder
CEPR,
No. 18640,
2023
Abstract
While access to high-quality microdata is essential for economic research and policy evaluation, effective access to such data remains limited in Europe. It varies from country to country, with uneven information on access procedures. This is a major obstacle to social science research, including research on European competitiveness and the effects of climate change, inequality, globalization, and digitalization. The objective of this paper, which is based on a brainstorming exercise coordinated by CEPR and CompNet, is to assess the status quo and discuss a series of proposals for improving access to Microdata for economic research. We underline the need for developing the relevant tools for extended access to and use of European business statistics microdata. Building such tools entails both establishing the requested microdata and creating a body facilitating cross-country access to the established databases with harmonized content.
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Die Gemeinschaftsdiagnose. Wirtschaftspolitischer Hintergrund, Methoden und Prognosegüte
Oliver Holtemöller
WiSt - Wirtschaftswissenschaftliches Studium,
No. 9,
2023
Abstract
This paper presents the Joint Economic Forecast (Gemeinschaftsdiagnose, GD) of the leading German economic research institutes. The GD provides a reference for the federal government's macroeconomic projections on which the tax estimates are based, and it informs economic policy makers, the media and the general public about important economic developments. The reports are published each spring and fall.
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Why Is the Roy-Borjas Model Unable to Predict International Migrant Selection on Education? Evidence from Urban and Rural Mexico
Stefan Leopold, Jens Ruhose, Simon Wiederhold
IWH Discussion Papers,
No. 16,
2023
Abstract
The Roy-Borjas model predicts that international migrants are less educated than nonmigrants because the returns to education are generally higher in developing (migrant-sending) than in developed (migrant-receiving) countries. However, empirical evidence often shows the opposite. Using the case of Mexico-U.S. migration, we show that this inconsistency between predictions and empirical evidence can be resolved when the human capital of migrants is assessed using a two-dimensional measure of occupational skills rather than by educational attainment. Thus, focusing on a single skill dimension when investigating migrant selection can lead to misleading conclusions about the underlying economic incentives and behavioral models of migration.
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AIECE General Report, Part 2, Spring 2023
Andrej Drygalla, Axel Lindner, Birgit Schultz
IWH Studies,
No. 4,
2023
Abstract
The Halle Institute for Economic Research (IWH) is a member of AIECE (Association d'Instituts Europeens de Conjoncture Economique/Association of European Conjuncture Institutes), an association of independent European institutes involved in surveying economic conditions and developments, and in short-term macroeconomic forecasting. The main objective of the Association is to stimulate the exchanges between its members with a view to improve their insight into international economic developments. This ranges from the exchange of statistical or institutional information to discussions on economic policy Guidelines to common research activities. The AIECE organises between its members an exchange of view, of information and of literature on international economic developments, in particular in Europe. The Association provides the framework for joint activities of its members in areas of common interest. Its structure allows its members to develop common views on the future cyclical development. In order to meet these objectives the Association has half-yearly plenary meetings, centred around a general report on the European conjuncture prepared in turn by one of the members in cooperation with the other member institutes, but also with discussions of the working group reports and of special surveys prepared by member institutes. In Spring 2023, the report was written by the Halle Institute for Economic Research (IWH).
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