The Economic Development of Saxony-Anhalt since 1990
Oliver Holtemöller, Axel Lindner
Abstract
In diesem Beitrag wird die wirtschaftliche Entwicklung Sachsen-Anhalts seit 1990 im Kontext des ostdeutschen Transformationsprozesses von einer Zentralverwaltungswirtschaft zu einer Marktwirtschaft beschrieben. Die wirtschaftliche Leistungsfähigkeit Sachsen-Anhalts hat in den frühen 1990er Jahren zunächst schnell gegenüber Westdeutschland aufgeholt, vor allem weil der Kapitalstock modernisiert und erweitert worden ist. Seit einiger Zeit stagniert der Aufholprozess jedoch, und das Bruttoinlandsprodukt je Erwerbstätigen liegt etwa 20% unter dem westdeutschen Niveau. Die wirtschaftspolitische Herausforderung besteht darin, den Aufholprozess durch die Förderung von Forschung und Innovation und durch bessere Qualifizierung der Erwerbstätigen weiter voranzubringen.
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19.04.2018 • 7/2018
Joint Economic Forecast Spring 2018: Germany’s Economic Experts Raise Forecast Slightly
Berlin, 19 April – Germany’s leading economic experts raised their forecasts for 2018 and 2019 slightly in their Spring Joint Economic Forecast released on Thursday in Berlin. They now expect economic growth of 2.2 percent for this year and 2.0 percent for 2019, versus 2.0 percent and 1.8 percent respectively in their autumn forecast. “The German economy is still booming, but the air is getting thinner as unused capacities are shrinking“, notes Timo Wollmershaeuser, ifo Head of Economic Forecasting. Commenting on the new German government’s economic policy, he adds: “It is precisely when the government’s coffers are full that fiscal policy should reflect the implications of its actions for overall economic stability and the sustainability of public finances. The extension of statutory pension benefits outlined in the coalition agreement runs counter to the idea of sustainability.”
Oliver Holtemöller
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15.03.2018 • 3/2018
Consistently strong economy, but risks are increasing
The global upswing continues in 2018. The German economy is cur-rently in a boom and is increasingly coming up against capacity limits. “According to our forecast, gross domestic product will expand by 2.2% in 2018; the general government surplus will amount to 1.1% in relation to gross domestic product. Economic growth in East Germany is likely to be slightly below the German growth rate”, says Oliver Holtemöller, head of the Department Macroeconomics and IWH vice president.
Oliver Holtemöller
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Early-Stage Business Formation: An Analysis of Applications for Employer Identification Numbers
Kimberly Bayard, Emin Dinlersoz, Timothy Dunne, John Haltiwanger, Javier Miranda, John Stevens
NBER Working Paper,
No. 24364,
2018
Abstract
This paper reports on the development and analysis of a newly constructed dataset on the early stages of business formation. The data are based on applications for Employer Identification Numbers (EINs) submitted in the United States, known as IRS Form SS-4 filings. The goal of the research is to develop high-frequency indicators of business formation at the national, state, and local levels. The analysis indicates that EIN applications provide forward-looking and very timely information on business formation. The signal of business formation provided by counts of applications is improved by using the characteristics of the applications to model the likelihood that applicants become employer businesses. The results also suggest that EIN applications are related to economic activity at the local level. For example, application activity is higher in counties that experienced higher employment growth since the end of the Great Recession, and application counts grew more rapidly in counties engaged in shale oil and gas extraction. Finally, the paper provides a description of new public-use dataset, the “Business Formation Statistics (BFS),” that contains new data series on business applications and formation. The initial release of the BFS shows that the number of business applications in the 3rd quarter of 2017 that have relatively high likelihood of becoming job creators is still far below pre-Great Recession levels.
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Does Administrative Status Matter for Urban Growth? – Evidence from Present and Former County Capitals in East Germany
Bastian Heider, Martin T. W. Rosenfeld, Albrecht Kauffmann
Growth and Change,
No. 1,
2018
Abstract
Public sector activities are often neglected in the economic approaches used to analyze the driving forces behind urban growth. The institutional status of a regional capital is a crucial aspect of public sector activities. This paper reports on a quasi-natural experiment on county towns in East Germany. Since 1990, cities in East Germany have demonstrated remarkable differences in population development. During this same period, many towns have lost their status as a county seat due to several administrative reforms. Using a difference-in-difference approach, the annual population development of former county capitals is compared to population change in towns that have successfully held on to their capital status throughout the observed period. The estimations show that maintaining county capital status has a statistically significant positive effect on annual changes in population. This effect is furthermore increasing over time after the implementation of the respective reforms.
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Differences Make a Difference: Diversity in Social Learning and Value Creation
Yiwei Fang, Bill Francis, Iftekhar Hasan
Journal of Corporate Finance,
2018
Abstract
Prior research has demonstrated that CEOs learn privileged information from their social connections. Going beyond the importance of the number of social ties in a CEO's social network, this paper studies the value generated from a diverse social environment. We construct an index of social-network heterogeneity (SNH) that captures the extent to which CEOs are connected to people of different demographic attributes and skill sets. We find that higher CEO SNH leads to greater firm value through the channels of better corporate innovation and diversified M&As. Overall, the evidence suggests that CEOs' exposure to human diversity enhances social learning and creates greater growth opportunities for firms.
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When Arm’s Length is too Far: Relationship Banking over the Credit Cycle
Thorsten Beck, Hans Degryse, Ralph De Haas, Neeltje van Horen
Journal of Financial Economics,
No. 1,
2018
Abstract
We conduct face-to-face interviews with bank CEOs to classify 397 banks across 21 countries as either relationship or transaction lenders. We then use the geographic coordinates of these banks’ branches and of 14,100 businesses to analyze how the lending techniques of banks in the vicinity of firms are related to credit constraints at two contrasting points of the credit cycle. We find that while relationship lending is not associated with credit constraints during a credit boom, it alleviates such constraints during a downturn. This positive role of relationship lending is stronger for small and opaque firms and in regions with a more severe economic downturn. Moreover, our evidence suggests that relationship lending mitigates the impact of a downturn on firm growth and does not constitute evergreening of loans.
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On Growing through Cycles: Matsuyama's M-map and Li-Yorke Chaos
Liuchun Deng, M. Ali Khan
Journal of Mathematical Economics,
January
2018
Abstract
Recent work of Gardini et al. (2008), building on earlier work of Mitra (2001) and Mukherji (2005), considers the so-called M-map that generates a dynamical system underlying Matsuyama’s (1999) endogenous growth model. We offer proofs of the fact that there do not exist 3- or 5-period cycles in the M-map, and an example (a numerical proof) of the existence of a 7-period cycle. We use the latter, and a construction in Khan and Piazza (2011), to identify a range of parameter values of the M-map that guarantee the existence of cycles of all periods, except 3 and 5. Our argumentation relies on, and reports, the first four iterations of the M-map that may have independent interest.
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The European Refugee Crisis and the Natural Rate of Output
Katja Heinisch, Klaus Wohlrabe
Applied Economics Letters,
No. 16,
2017
Abstract
The European Commission follows a harmonized approach for calculating structural (potential) output for EU member states that takes into account labour as an important ingredient. This article shows how the recent huge migrants’ inflow to Europe affects trend output. Due to the fact that the immigrants immediately increase the working population but effectively do not enter the labour market, we illustrate that the potential output is potentially upward biased without any corrections. Taking Germany as an example, we find that the average medium-term potential growth rate is lower if the migration flow is modelled adequately compared to results based on the unadjusted European Commission procedure.
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Progressive Tax-like Effects of Inflation: Fact or Myth? The U.S. Post-war Experience
Matthias Wieschemeyer, Bernd Süssmuth
IWH Discussion Papers,
No. 33,
2017
Abstract
Inflation and earnings growth can push some tax payers into higher brackets in the absence of inflation-indexed schedules. Moreover, inflation may affect the composition of individuals’ income sources. As a result, depending on the relative tax burden of labour and capital, inflation may decrease or increase the difference between before-tax and after-tax income. However, whether some and if so which percentiles of the income distribution net benefit from inflation via taxation is a widely unexplored question. We make use of a novel dataset on U.S. pre-tax and post-tax income distribution series provided by Pike ty et al. (2018) for the years 1962 to 2014 to answer this question. To this end, we estimate local projections to quantify dynamic effects. We find that inflation shocks increase progressivity of taxation not only contemporaneously but also with some repercussion of several years after the shock. While particularly the bottom two quintiles gain in share, it is not the top but the fourth quintile that lastingly loses.
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