17.08.2022 • 19/2022
Labour mobility is part of structural change
The coal phase-out will also change the affected regions in that part of the workforce will migrate. Politicians should take this process into account in structural policy, because it cannot be completely prevented. A study published by the Halle Institute for Economic Research (IWH) illustrates this with a historical example.
Oliver Holtemöller
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Productivity, Managers’ Social Connections and the Financial Crisis
Iftekhar Hasan, Stefano Manfredonia
Journal of Banking and Finance,
August
2022
Abstract
This paper investigates whether managers’ personal connections help corporate productivity to recover after a negative economic shock. Leveraging the heterogeneity in the severity of the financial crisis across different sectors, the paper reports that (i) the financial crisis had a negative effect on within-firm productivity, (ii) the effect was long-lasting and persistent, supporting a productivity-hysteresis hypothesis, and (iii) managers’ personal connections allowed corporations to recover from this productivity slowdown. Among the possible mechanisms, we show that connected managers operating in affected sectors foster productivity recovery through higher input cost efficiency and better access to the credit market, as well as more efficient use of labour and capital.
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Konjunktur aktuell: Krieg treibt Energiepreise – Hohe Inflation belastet Konjunktur
Konjunktur aktuell,
No. 2,
2022
Abstract
Die Weltwirtschaft ist auch im Sommerhalbjahr verschiedenen schweren Belastungen ausgesetzt, die die Preise stark steigen lassen. Produktionsstilllegungen im Zuge der chinesischen Null-Covid-Strategie und der Angriff gegen die Ukraine heizen die Inflation weltweit an. Auch in Deutschland wird die konjunkturelle Entwicklung durch die mit dem Krieg verbundenen Preissteigerungen sowie unterbrochene Lieferketten schwer belastet. Die konjunkturellen Aussichten für den Sommer sind trüb. Das deutsche Bruttoinlandsprodukt wird im Jahr 2022 um 1,5% zunehmen. In Ostdeutschland liegt der Zuwachs bei 1%.
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01.06.2022 • 12/2022
IWH welcomes top international researcher as head of new department
A powerful boost for the Halle Institute for Economic Research (IWH): Merih Sevilir, a world-renowned researcher on the interplay of financial and labour markets, is heading the Institute’s newest department as of today. Her expertise strengthens the unique selling points of the institute and can be expected to generate significant opportunities for policy insights.
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Regionale Effekte einer durch einen Lieferstopp für russisches Gas ausgelösten Rezession in Deutschland
Oliver Holtemöller, Axel Lindner, Christoph Schult
IWH Policy Notes,
No. 1,
2022
Abstract
Ein Stopp der russischen Gaslieferungen würde zu einer Rezession der deutschen Wirtschaft führen. Nicht alle Regionen wären davon gleich betroffen: Vor allem wäre dort, wo das Verarbeitende Gewerbe ein großes Gewicht hat, mit einem deutlich stärkeren Einbruch der Wirtschaftsleistung zu rechnen als andernorts. Deshalb wäre Westdeutschland und dort insbesondere der Süden stärker betroffen als der Osten Deutschlands. Dagegen spielt für die Frage, wie viele Arbeitsplätze durch einen bestimmten Rückgang der Wertschöpfung gefährdet sind, die Höhe der Arbeitsproduktivität eine ausschlaggebende Rolle.
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Explaining Regional Disparities in Housing Prices Across German Districts
Lars Brausewetter, Stephan L. Thomsen, Johannes Trunzer
IWH Discussion Papers,
No. 13,
2022
Abstract
Over the last decade, German housing prices have increased unprecedentedly. Drawing on quality-adjusted housing price data at the district level, we document large and increasing regional disparities: Growth rates were higher in 1) the largest seven cities, 2) districts located in the south, and 3) districts with higher initial price levels. Indications of price bubbles are concentrated in the largest cities and in the purchasing market. Prices seem to be driven by the demand side: Increasing population density, higher shares of academically educated employees and increasing purchasing power explain our findings, while supply remained relatively constrained in the short term.
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The Urban Wage Premium in Imperfect Labour Markets
Boris Hirsch, Elke J. Jahn, Alan Manning, Michael Oberfichtner
Journal of Human Resources,
April
2022
Abstract
Using administrative data for West Germany, this paper investigates whether part of the urban wage premium stems from greater competition in denser labor markets. We show that employers possess less wage-setting power in denser markets. We further document that an important part of the observed urban wage premia can be explained by greater competition in denser labor markets.
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Konjunktur aktuell: Preisschock gefährdet Erholung der deutschen Wirtschaft
Konjunktur aktuell,
No. 1,
2022
Abstract
Der Angriff Russlands auf die Ukraine hat die wirtschaftlichen Rahmenbedingungen in Europa drastisch verschlechtert. Rohstoff- und Energiepreise sind stark gestiegen, und die Sanktionen bringen den gesamten Russlandhandel nahezu zum Erliegen. Auch die deutsche Wirtschaft trifft es vor allem über einen Energiepreisschock, aber auch über unterbrochene Handelsströme und eine allgemeine Verunsicherung. Gleichwohl erhält die Konjunktur von der Aufhebung vieler Pandemie-Restriktionen einen kräftigen Schub. Das deutsche BIP wird 2022 um 3,1% zunehmen. Die ostdeutsche Wirtschaft wird vom Krieg kaum schwerer getroffen als die gesamtdeutsche Wirtschaft.
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Firm-level Employment, Labour Market Reforms, and Bank Distress
Ralph Setzer, Moritz Stieglitz
Journal of International Money and Finance,
February
2022
Abstract
We explore the impact of financial frictions on the employment effect of labour market reforms. Our study combines a new cross-country reform database on labour market reforms with matched firm-bank data for nine euro area countries over the period 1999 to 2013. While we find that labour market reforms are overall effective in increasing employment, restricted access to bank credit can undo up to half of medium to long-term employment gains at the firm-level. Entrepreneurs without sufficient access to credit cannot reap the full benefits of more flexible employment regulation.
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Aleksandr Kazakov, Michael Koetter, Mirko Titze, Lena Tonzer
Abstract
We study whether government subsidies can stimulate bank funding of marginal investment projects and the associated effect on financial stability. We do so by exploiting granular project-level information for the largest regional economic development programme in Germany since 1997: the Improvement of Regional Economic Structures programme (GRW). By combining the universe of subsidised firms to virtually all German local banks over the period 1998-2019, we test whether this large-scale transfer programme destabilised regional credit markets. Because GRW subsidies to firms are destabilised at the EU level, we can use it as an exogenous shock to identify bank responses. On average, firm subsidies do not affect bank lending, but reduce banks’ distance to default. Average effects conflate important bank-level heterogeneity though. Conditional on various bank traits, we show that well capitalised banks with more industry experience expand lending when being exposed to subsidised firms without exhibiting more risky financial profiles. Our results thus indicate that stable banks can act as an important facilitator of regional economic development policies. Against the backdrop of pervasive transfer payments to mitigate Covid-19 losses and in light of far-reaching transformation policies required to green the economy, our study bears important implications as to whether and which banks to incorporate into the design of transfer Programmes.
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