01.04.2026 • 9/2026
Energy price shock dampens recovery – inflation rises
Although the leading economic research institutes consider the German economy to be in a recovery phase following a downturn lasting several years, they nevertheless expect only a moderate increase in gross domestic product of 0.6% for 2026 and 0.9% for 2027. “The energy price shock triggered by the Iran war is hitting the recovery hard, but at the same time expansionary fiscal policy is bolstering the domestic economy and preventing a stronger slide,” says Timo Wollmershäuser, Head of Forecasts at the ifo Institute. The institutes estimate that the inflation rate will rise to an average of 2.8% in 2026 and 2.9% in 2027.
Oliver Holtemöller
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11.12.2025 • 34/2025
Slight upturn on the horizon, structural problems remain
As the year draws to a close, it remains uncertain whether the German economy is on a path to recovery, as export weakness persisted through the autumn. Nevertheless, a slight upturn is forecast for 2026, supported by fiscal stimulus and rising real incomes. According to the winter forecast of the Halle Institute for Economic Research (IWH), output is projected to grow by 1.0% in 2026, after an increase of just 0.2% in 2025. In September, the IWH economists had predicted growth of 0.8% for 2026 and 0.2% for the current year. According to this forecast, the pace of expansion in East Germany is expected to be slightly slower, mainly due to demographic factors.
Oliver Holtemöller
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04.09.2025 • 26/2025
Recovery on shaky ground – tariffs dampen growth, but a change in fiscal policy is on the way
In late summer 2025, it is still unclear whether the German economy is on the road to recovery, as it has to cope with the dampening effect of higher US tariffs in the second half of the year. It is not until 2026 that fiscal policy stimulus measures, combined with low key interest rates, will probably lead to an economic upturn. According to the autumn forecast of the Halle Institute for Economic Research (IWH), production is then expected to increase by 0.8%, following 0.2% in 2025. Similar rates of expansion are also expected for East Germany. In June, the IWH economists were forecasting growth of 1.1% for 2026 and 0.4% for the current year.
Oliver Holtemöller
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Financial Stability
Financial Systems: The Anatomy of the Market Economy How the financial system is constructed, how it works, how to keep it fit and what good a bit of chocolate can do. Dossier In…
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14th CompNet Annual Conference
14th CompNet Annual Conference 25-26 September, 2025 in Vilnius, Lithuania Programme Highlights – 14th CompNet Annual Conference, Vilnius, 25–26 September 2025 The conference…
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Alumni
Alumni IWH provides guidance and support in job placement after graduation, including letters of recommendation and career advice. Graduates have found placements in academia…
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13.03.2025 • 10/2025
A turning point for the German economy?
The international political environment has fundamentally changed with looming trade wars and a deteriorating security situation in Europe. The leading parties in Germany are setting the stage for debt-financed additional defence tasks with far-reaching changes to the debt brake. This entails major risks for the German economy, but also opportunities. Meanwhile, the economy continues to be in a downturn. According to the spring forecast of the Halle Institute for Economic Research (IWH), gross domestic product (GDP) in 2025 is likely to be roughly the same as in the previous year, and it will not increase significantly until 2026, partly because uncertainty about German economic policy is likely to decrease after the new government is established, meaning that the savings rate of private households will fall again somewhat and the debt-financed additional government spending will gradually have an impact on demand. The IWH economists are forecasting an increase in GDP of 0.1% for 2025. In December, they were still forecasting growth of 0.4% for 2025. The outlook is similar for East Germany, where production is likely to have increased slightly in 2024, unlike in Germany as a whole.
Oliver Holtemöller
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12.12.2024 • 31/2024
Frosty prospects for the German economy
The German economy will continue to stagnate in winter 2024/2025. Industry is suffering from a loss of international competitiveness. For this reason and due to the unclear economic policy outlook, firms and consumers are holding back on spending, although incomes have increased recently. Consumer spending will only increase more strongly once the uncertainty subsides. According to the winter forecast of the Halle Institute for Economic Research (IWH), gross domestic product in Germany is expected to fall by 0.2% in 2024 and to expand by 0.4% in 2025. In September, the IWH forecast had still assumed a zero growth in 2024 and a growth of 1.0% in 2025. In East Germany, gross domestic product will increase by 0.5% both this year and in 2025.
Oliver Holtemöller
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Non-Standard Errors
Albert J. Menkveld, Anna Dreber, Felix Holzmeister, Juergen Huber, Magnus Johannesson, Michael Koetter, Markus Kirchner, Sebastian Neusüss, Michael Razen, Utz Weitzel, Shuo Xia, et al.
Journal of Finance,
Vol. 79 (3),
2024
Abstract
In statistics, samples are drawn from a population in a datagenerating process (DGP). Standard errors measure the uncertainty in sample estimates of population parameters. In science, evidence is generated to test hypotheses in an evidencegenerating process (EGP). We claim that EGP variation across researchers adds uncertainty: non-standard errors. To study them, we let 164 teams test six hypotheses on the same sample. We find that non-standard errors are sizeable, on par with standard errors. Their size (i) co-varies only weakly with team merits, reproducibility, or peer rating, (ii) declines significantly after peer-feedback, and (iii) is underestimated by participants.
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07.03.2024 • 6/2024
Germany stuck in stagnation ‒ private consumption remains below pre-pandemic levels
Weak consumption and investment in Germany are partly due to inflation-induced losses in real income and declines in energy-intensive production. However, concerns about the competitive strength of the German economy are also weighing on the willingness of private households and companies to spend. In its spring forecast, the Halle Institute for Economic Research (IWH) expects gross domestic product to expand by just 0.2% in 2024, while the forecast for 2025 includes growth of 1.5% (eastern Germany: 0.5% and 1.4%). Last December, the IWH forecast had assumed an increase of 0.5% for Germany in 2024 and of 1.2% for 2025.
Oliver Holtemöller
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