Drilling and Debt
Erik P. Gilje, Elena Loutskina, Daniel Murphy
Journal of Finance,
No. 3,
2020
Abstract
This paper documents a previously unrecognized debt‐related investment distortion. Using detailed project‐level data for 69 firms in the oil and gas industry, we find that highly levered firms pull forward investment, completing projects early at the expense of long‐run project returns and project value. This behavior is particularly pronounced prior to debt renegotiations. We test several channels that could explain this behavior and find evidence consistent with equity holders sacrificing long‐run project returns to enhance collateral values and, by extension, mitigate lending frictions at debt renegotiations.
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08.04.2020 • 5/2020
Economy in Shock – Fiscal Policy to Counteract
The coronavirus pandemic is triggering a severe recession in Germany. Economic output will shrink by 4.2% this year. This is what the leading economics research institutes expect in their spring report. For next year, they are forecasting a recovery and growth of 5.8%.
Oliver Holtemöller
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Coal Phase-out in Germany – Implications and Policies for Affected Regions
Pao-Yu Oei, Hauke Hermann, Philipp Herpich, Oliver Holtemöller, Benjamin Lünenbürger, Christoph Schult
Energy,
April
2020
Abstract
The present study examines the consequences of the planned coal phase-out in Germany according to various phase-out pathways that differ in the ordering of power plant closures. Soft-linking an energy system model with an input-output model and a regional macroeconomic model simulates the socio-economic effects of the phase-out in the lignite regions, as well as in the rest of Germany. The combination of two economic models offers the advantage of considering the phase-out from different perspectives and thus assessing the robustness of the results. The model results show that the lignite coal regions will exhibit losses in output, income and population, but a faster phase-out would lead to a quicker recovery. Migration to other areas in Germany and demographic changes will partially compensate for increasing unemployment, but support from federal policy is also necessary to support structural change in these regions.
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02.10.2019 • 20/2019
Joint Economic Forecast Autumn 2019: Economy Cools Further – Industry in Recession
Berlin, October 2, 2019 – Germany’s leading economics research institutes have revised their economic forecast for Germany significantly downward. Whereas in the spring they still expected gross domestic product (GDP) to grow by 0.8% in 2019, they now expect GDP growth to be only 0.5%. Reasons for the poor performance are the falling worldwide demand for capital goods – in the exporting of which the Germany economy is specialised – as well as political uncertainty and structural changes in the automotive industry. By contrast, monetary policy is shoring up macroeconomic expansion. For the coming year, the economic researchers have also reduced their forecast of GDP growth to 1.1%, having predicted 1.8% in the spring.
Oliver Holtemöller
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09.07.2019 • 17/2019
IWH rated "very good" and recommended for further funding
The Halle Institute for Economic Research (IWH) – Member of the Leibniz Association has been providing remarkable research and policy advice services for many years and should therefore continue to receive joint basic funding by Federal government and the Länder in future. This was the conclusion of today's meeting of the Senate of the Leibniz Association. At the end of the evaluation, the Institute was rated "very good" in all areas.
Reint E. Gropp
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14.12.2017 • 39/2017
Cyclical upswing in Germany and in the world
At the turn of the year, the cyclical upswing in Germany continues. Gross domestic product is expected to increase by 2.2% in 2017, and because this year has seen significantly fewer working days than before, the rate of change amounts, adjusted for calendar effects, to even 2.5%. “The upswing is broad-based”, says Oliver Holtemöller, head of the Department Macroeconomics and IWH vice president. “For quite a long time now, significant increases in employment have been driving private incomes, consumption and housing construction. The latter was, in addition, stimulated by low interest rates.” Currently, German exports are benefiting from the vivid international economy. Not least since monetary policy in the euro area remains expansionary for the time being, we expect the upturn to continue in 2018 and production to increase again by 2.2%. Consumer price inflation is, with 1.7%, still moderate in both 2017 and 2018. Although domestic price pressures are on the rise, the effects of the energy price increase in 2017 expire in 2018, and the appreciation of the euro in the summer of 2017 will dampen price dynamics.
Oliver Holtemöller
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Plant-based Bioeconomy in Central Germany – A Mapping of Actors, Industries and Places
Wilfried Ehrenfeld, Frieder Kropfhäußer
Technology Analysis and Strategic Management,
No. 5,
2017
Abstract
The bioeconomy links industrial and agricultural research and production and is expected to provide growth, particularly in rural areas. However, it is still unclear which companies, research institutes and universities make up the bioeconomy. This makes it difficult to evaluate the policy measures that support the bioeconomy. The aim of this article is to provide an inventory of relevant actors in the three Central German states of Saxony, Saxony-Anhalt and Thuringia. First we take an in-depth look at the different sectors, outline the industries involved, note the location and age of the enterprises and examine the distribution of important European industrial activity classification (NACE) codes. Our results underline the fact that established industry classifications are insufficient in identifying the plant-based bioeconomy population. We also question the overly optimistic statements regarding growth potentials in rural areas and employment potentials in general.
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Upturn Remains Moderate — Economic Policy Lacks Growth Orientation
Roland Döhrn, Ferdinand Fichtner, Oliver Holtemöller, Timo Wollmershäuser
Wirtschaftsdienst,
No. 5,
2016
Abstract
Die deutsche Wirtschaft befindet sich in einem moderaten Aufschwung. Zu diesem Ergebnis kommt die Mitte April veröffentlichte Gemeinschaftsdiagnose der Wirtschaftsforschungsinstitute. Das Bruttoinlandsprodukt dürfte demnach in diesem Jahr um 1,6% und im kommenden Jahr um 1,5% zulegen. Getragen wird der Aufschwung vom privaten Konsum, der vom anhaltenden Beschäftigungsaufbau, den spürbaren Steigerungen der Lohn- und Transfereinkommen und den Kaufkraftgewinnen infolge der gesunkenen Energiepreise profitiert.
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