Do We Want These Two to Tango? On Zombie Firms and Stressed Banks in Europe
Manuela Storz, Michael Koetter, Ralph Setzer, Andreas Westphal
IWH Discussion Papers,
No. 13,
2017
Abstract
We show that the speed and type of corporate deleveraging depends on the interaction between corporate and financial sector health. Based on granular bank-firm data pertaining to small and medium-sized enterprises (SME) from five stressed and two non-stressed euro area economies, we show that “zombie” firms generally continued to lever up during the 2010–2014 period. Whereas relationships with stressed banks reduce SME leverage on average, we also show that zombie firms that are tied to weak banks in euro area periphery countries increase their indebtedness even further. Sustainable economic recovery therefore requires both: deleveraging of banks and firms.
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Expertise in the Political Process — Benefits, Limits and Risks
Aida Ćumurović, Reint E. Gropp, Lars Brozus, Oliver Geden, Uwe Schneidewind, Karl-Heinz Paqué, Lars P. Feld
Wirtschaftsdienst,
No. 4,
2017
Abstract
Die Wahl Donald Trumps, der Brexit und der Erfolg populistischer Parteien in Europa zeigen tiefsitzende Skepsis gegenüber Experten und Eliten und deren komplexen Erklärungen der politischen und wirtschaftlichen Zusammenhänge. Ökonomen wird vorgeworfen, sich in Detailfragen zu verlieren und ein unrealistisches Menschenbild zu pflegen. Tatsächlich wäre es aber wichtig, die Unabhängigkeit der Ökonomen abzusichern, mehr Transparenz über die Hintergründe ihrer Ergebnisse herzustellen und stärker auf die Relevanz ihrer Forschungsfragen zu achten. Zudem sollten sie mehr Wert auf eine für alle verständliche Kommunikation mit Politik und Medien legen. Umgekehrt sollten letztere sich aber auch ernsthaft mit den ökonomischen Ergebnissen auseinandersetzen.
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12.04.2017 • 19/2017
Joint Economic Forecast Spring 2017: Upturn in Germany strengthens in spite of global economic risks
The German economy is already in the fifth year of a moderate upturn. According to the Gemeinschaftsdiagnose (GD, joint economic forecast) that was prepared by Germany’s five leading economic research institutes on behalf of the Federal Government, capacity utilization is gradually increasing, and aggregate production capacities are now likely to have slightly exceeded their normal utilisation levels. However, cyclical dynamics remain low compared to earlier periods of recoveries, as consumption expenditures, which do not exhibit strong fluctuations, have been the main driving force so far. In addition, net migration increases potential output, counteracting a stronger capacity tightening. “Gross domestic product (GDP) is expected to expand by 1.5% (1.8% adjusted for calendar effects) and 1.8% in the next year. Unemployment is expected to fall to 6.1% in 2016, to 5.7% in 2017 and 5.4% in 2018”, says Oliver Holtemöller, Head of the Department Macroeconomics and vice president of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association. Inflation is expected to increase markedly over the forecast horizon. After an increase in consumer prices of only 0.5% in 2016, the inflation rate is expected to rise to 1.8% in 2017 and 1.7% in 2018. The public budget surplus will reduce only modestly. Public finances are slightly stimulating economic activity in the current year and are cyclically neutral in the year ahead.
Oliver Holtemöller
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Private Equity and Industry Performance
Shai B. Bernstein, Josh Lerner, Morten Sorensen, Per Strömberg
Management Science,
No. 4,
2017
Abstract
The growth of the private equity industry has spurred concerns about its impact on the economy. This analysis looks across nations and industries to assess the impact of private equity on industry performance. We find that industries where private equity funds invest grow more quickly in terms of total production and employment and appear less exposed to aggregate shocks. Our robustness tests provide some evidence that is consistent with our effects being driven by our preferred channel.
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Coping with Change: International Differences in the Returns to Skills
Eric A. Hanushek, Guido Schwerdt, Simon Wiederhold, Ludger Woessmann
Economics Letters,
April
2017
Abstract
International data from the PIAAC survey allow estimation of comparable labor-market returns to skills for 32 countries. Returns to skills are larger in faster growing economies, consistent with the hypothesis that skills are particularly important for adaptation to economic change.
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IWH-Konjunkturbarometer Ostdeutschland: Moderater Anstieg der Produktion im Winterhalbjahr 2016/2017
Udo Ludwig, Franziska Exß
Konjunktur aktuell,
No. 1,
2017
Abstract
Auf die Stagnation im dritten Quartal des vergangenen Jahres folgte in den Monaten Oktober bis Dezember ein moderater Zuwachs der Produktion. Das Bruttoinlandsprodukt ist in den Neuen Bundesländern – saisonbereinigt nach dem Berliner Verfahren – um 0,3% gestiegen (Alte Bundesländer: 0,4%). Die Steigerung beruht auf einem Wechsel der Auftriebskräfte: Das Produzierende Gewerbe legte nach dem Minus an Wertschöpfung im Sommer wieder zu, und das Plus der Dienstleister hat sich erhöht.
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Konjunktur aktuell: Beschäftigungsboom in Deutschland – aber gesamtwirtschaftlich keine Überhitzung
Oliver Holtemöller, Hans-Ulrich Brautzsch, Andrej Drygalla, Katja Heinisch, Martina Kämpfe, Konstantin Kiesel, Axel Lindner, Brigitte Loose, Jan-Christopher Scherer, Birgit Schultz, Matthias Wieschemeyer, Götz Zeddies
Konjunktur aktuell,
No. 1,
2017
Abstract
Die deutsche Wirtschaft ist in recht guter Verfassung. So hält der Beschäftigungsaufbau an, und der private Konsum legt aufgrund steigender Realeinkommen robust zu. Die Ausrüstungsinvestitionen werden allerdings weiterhin nur verhalten ausgeweitet. Insgesamt expandiert die Nachfrage in etwa so schnell wie das Produktionspotenzial, und die Auslastung ist normal. Im Jahr 2017 dürfte die Zuwachsrate des Bruttoinlandsprodukts mit 1,3% nicht aufgrund einer schwächeren Konjunktur, sondern vor allem wegen einer geringeren Anzahl an Arbeitstagen niedriger als im Vorjahr ausfallen.
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15.03.2017 • 13/2017
The German Economy: Employment Boom in Germany, but no Overheating of the Economy
Employment in Germany continues to increase healthily, and private consumption expands due to rising real incomes. Investment in equipment, however, remains modest. Overall, economic demand is expanding at roughly the growth rate of potential Gross Domestic Product (GDP), and the output gap is nearly closed. “In 2017, GDP will increase by 1.3% and thus at a lower rate than in the previous year, but this is only due to fewer working days and not to sliding demand,” says Oliver Holtemoeller, Head of the Department Macroeconomics and IWH vice president.
Oliver Holtemöller
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International Banking and Cross-border Effects of Regulation: Lessons from Germany
Jana Ohls, Markus Pramor, Lena Tonzer
International Journal of Central Banking,
Supplement 1, March
2017
Abstract
We analyze the inward and outward transmission of regulatory changes through German banks’ (international) loan portfolio. Overall, our results provide evidence for international spillovers of prudential instruments. These spillovers are, however, quite heterogeneous between types of banks and can only be observed for some instruments. For instance, domestic affiliates of foreign-owned global banks reduce their loan growth to the German economy in response to a tightening of sector-specific capital buffers, local reserve requirements, and loan-to-value ratios in their home country. Furthermore, from the point of view of foreign countries, tightening reserve requirements is effective in reducing lending inflows from German banks. Finally, we find that business and financial cycles matter for lending decisions.
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