11.10.2016 • 44/2016
New look and feel for IWH website
The relaunched website of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association goes live today. After the successful launch of a new corporate design at the beginning of the year, IWH now presents itself also digitally in a new and adjusted way. The redesigned website focuses on IWH’s core issues and provides information tailored to each target group. Due to the responsive design, the new website can be perfectly read and navigated on smartphones and tablets as well.
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29.09.2016 • 40/2016
Joint Economic Forecast: German Economy on Track – Economic Policy needs to be Realigned
Thanks to a stable job market and solid consumption, the German economy is experiencing a moderate upswing. The GDP is expected to increase by 1.9 percent this year, 1.4 percent in 2017, and 1.6 percent in 2018, according to the Gemeinschaftsdiagnose (GD, joint economic forecast) that was prepared by five of Europe’s leading economic research institutes on behalf of the Federal Government. The most recent GD, which was released in April, predicted a GDP growth rate of 1.6 percent for 2016 and 1.5 percent for 2017.
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09.09.2016 • 38/2016
The Perception of Financial Inferiority Nurtures Negative Attitudes Towards Foreigners
When people feel that their own economic status is inferior to the economic status of a relevant peer group, it becomes more likely that they develop negative attitudes towards foreigners. This link was found in a new study of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association. The effect is particularly strong with respect to foreigners from low-wage countries.
Walter Hyll
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02.09.2016 • 35/2016
The German Economy: Still Robust Despite Sliding Sentiment
The prospects for the German economy are still quite favorable. While sentiment indicators suggest that growth will slow at the end of the year, domestic demand will continue on an upward trend. The German GDP should increase by 1.9% in 2016. For 2017 we expect a lower growth rate of 1.2%“Weaker export volumes and higher growth of imports are the relevant factors for the slowdown”, says Prof Oliver Holtemöller, IWH Vice president. Unemployment will rise a bit as more refugees enter the labor market. Consumer price inflation remains moderate. The general government balance (cyclically ad¬justed as well as unadjusted) will be in surplus in both 2016 and 2017.
Oliver Holtemöller
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11.08.2016 • 34/2016
2016 stress tests: Italian banks don’t look worse than German large commercial banks
The European Banking Authority today presented the results of the 2016 stress tests. They show that most European banks appear more or less stable. “What worries me is, however, that the Italian banks do not look worse than the large German commercial banks,” says Reint E. Gropp, president of the Halle Institute for Economic Research (IWH). “It appears that both Deutsche Bank and Commerzbank would benefit significantly from an increase in equity. The stress test was also missing two crucial points: One, the effect of a long lasting low interest rate environment on banks was not simulated. And second, the test did not take into consideration that many small institutions could fail at the same time. This is not an unlikely scenario, given how small banks in particular struggle with shrinking interest margins,“ says Gropp. Finally, the stress test should not distract from the urgency to solve the problems in the Italian banking system.
Reint E. Gropp
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27.07.2016 • 33/2016
The merger of London Stock Exchange and Deutsche Boerse was reasonable
Shareholders of Deutsche Boerse AG have agreed to merge with London Stock Exchange (LSE). “I appreciate this decision“, says Prof Reint E. Gropp, president of Halle Institute for Economic Research (IWH). “Europe is in need of a competitive financial center. Especially now, after the Brexit referendum, the arguments for a merger are more convincing than ever.”
Reint E. Gropp
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Aktuelle Trends: Turbulenzen an den Finanzmärkten vor und nach dem Brexit-Referendum
Lena Tonzer
Wirtschaft im Wandel,
No. 3,
2016
Abstract
Das Votum der britischen Bevölkerung, den EU-Verbund verlassen zu wollen, hat zu Turbulenzen auf den Finanzmärkten geführt. Bereits vor dem Referendum am 23. Juni 2016 war ein starker Rückgang der Kurse britischer Bankaktien zu beobachten, wenn die Wahrscheinlichkeit eines Brexits in den Umfragen über 50% stieg, verbunden mit einer Abwertung des britischen Pfunds gegenüber den meisten anderen wichtigen Währungen einschließlich des Euro.
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14.07.2016 • 32/2016
Arbeitslosigkeit des Vaters spornt Mädchen zu Bildungsaufstieg an
Arbeitslosigkeit vererbt sich nicht nur vom Vater auf den Sohn, sondern auch auf die Tochter. Kinder arbeitsloser Väter investieren zudem weniger in Bildung. Doch während bei den Söhnen vor allem indirekte Faktoren wie das gemeinsame Umfeld eine negative Rolle spielen, werden die Töchter zusätzlich auch direkt durch väterliche Arbeitslosigkeit beeinflusst. Eine neue Studie des Leibniz-Instituts für Wirtschaftsforschung Halle (IWH) zeigt: War der Vater arbeitslos, ist zwar auch bei der Tochter die Wahrscheinlichkeit künftiger Arbeitslosigkeit höher. Gleichzeitig existiert bei ihnen aber eine Gegenbewegung: Ihre Investitionen in Bildung steigen.
Steffen Müller
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20.06.2016 • 24/2016
Financial market reaction to poll data suggests strong effects of a Brexit on exchange rates and the banking system both in the UK and in the EU
On 23 June 2016, there will be a referendum in the United Kingdom (UK) on the question of whether or not the country should remain in the European Union (EU). We use the polls as a measure of the likelihood of an exit to examine the likely effect of a Brexit on financial markets. “Whenever the probability in the polls of a Brexit moves above 50%, we observe a substantial depreciation of the UK pound with respect to most major currencies (including the euro), and strong decline in bank stock prices, suggesting that markets feel the financial sector (both in the UK and the EU) will be most severely affected by a Brexit”, IWH President Reint E. Gropp says. There is little effect on the euro/US Dollar exchange rate. “A huge concern is that overall market volatility both in the UK and the EU are on record highs since last Thursday, reflecting the higher uncertainty associated with Brexit and how exactly, if it happened, it would come about.” Within the UK, we see some evidence for a flight to safety into UK government bonds, but no effects for German bonds.
Reint E. Gropp
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On the Low-frequency Relationship Between Public Deficits and Inflation
Martin Kliem, Alexander Kriwoluzky, Samad Sarferaz
Journal of Applied Econometrics,
No. 3,
2016
Abstract
We estimate the low-frequency relationship between fiscal deficits and inflation and pay special attention to its potential time variation by estimating a time-varying vector autoregression model for US data from 1900 to 2011. We find the strongest relationship neither in times of crisis nor in times of high public deficits, but from the mid 1960s up to 1980. Employing a structural decomposition of the low-frequency relationship and further narrative evidence, we interpret our results such that the low-frequency relationship between fiscal deficits and inflation is strongly related to the conduct of monetary policy and its interaction with fiscal policy after World War II.
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