Germany’s “Bazaar-economy” After the Financial and Economic Crisis
Hans-Ulrich Brautzsch, Udo Ludwig
Klaus Voy (Ed.): Außenhandel und Globalisierung in gesamtwirtschaftlicher Sicht. Marburg: Metropolis,
2018
Abstract
Die Finanz- und Wirtschaftskrise 2008/2009 traf die deutsche Wirtschaft infolge ihrer beträchtlichen Abhängigkeit von den Weltmärkten besonders stark über den Außenhandelskanal. Der Aufsatz behandelt den Netto-Einfluss des Exportschocks auf die Wertschöpfung und Beschäftigung in Deutschland und wendet dazu die Input-Output-Analyse an.
Read article
09.08.2017 • 29/2017
Networked and protected
During the financial crisis, billions were spent to rescue banks that were according to their governments too big to be allowed to fail. But a study by Michael Koetter from the Halle Institute for Economic Research (IWH) and co-authors shows that besides the size of the banks, the centrality within the global financial network was also pivotal for financial institutions to receive a bail-out.
Michael Koetter
Read
Banking Globalization, Local Lending, and Labor Market Effects: Micro-level Evidence from Brazil
Felix Noth, Matias Ossandon Busch
Abstract
This paper estimates the effect of a foreign funding shock to banks in Brazil after the collapse of Lehman Brothers in September 2008. Our robust results show that bank-specific shocks to Brazilian parent banks negatively affected lending by their individual branches and trigger real economic consequences in Brazilian municipalities: More affected regions face restrictions in aggregated credit and show weaker labor market performance in the aftermath which documents the transmission mechanism of the global financial crisis to local labor markets in emerging countries. The results represent relevant information for regulators concerned with the real effects of cross-border liquidity shocks.
Read article
How Do Insured Deposits Affect Bank Risk? Evidence from the 2008 Emergency Economic Stabilization Act
Claudia Lambert, Felix Noth, Ulrich Schüwer
Journal of Financial Intermediation,
January
2017
Abstract
This paper tests whether an increase in insured deposits causes banks to become more risky. We use variation introduced by the U.S. Emergency Economic Stabilization Act in October 2008, which increased the deposit insurance coverage from $100,000 to $250,000 per depositor and bank. For some banks, the amount of insured deposits increased significantly; for others, it was a minor change. Our analysis shows that the more affected banks increase their investments in risky commercial real estate loans and become more risky relative to unaffected banks following the change. This effect is most distinct for affected banks that are low capitalized.
Read article
04.01.2017 • 2/2017
Worse ratings by U.S. rating agencies for European sovereigns no argument for European rating agency
A new study by the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association shows that the major U.S. rating agencies rated European sovereigns significantly worse than Fitch, which is more “Europe oriented”. Although the findings in part support the claim of some European politicians during the recent debt crisis that there was an “anti-Europe” bias of the U.S. agencies, the study shows that a new European agency would not address this problem. The reason: Market participants would not listen to the new agency.
Reint E. Gropp
Read
Sovereign Credit Risk Co-movements in the Eurozone: Simple Interdependence or Contagion?
Manuel Buchholz, Lena Tonzer
International Finance,
No. 3,
2016
Abstract
We investigate credit risk co-movements and contagion in the sovereign debt markets of 17 industrialized countries during the period 2008–2012. We use dynamic conditional correlations of sovereign credit default swap spreads to detect contagion. This approach allows us to separate contagion channels from the determinants of simple interdependence. The results show that, first, sovereign credit risk co-moves considerably, particularly among eurozone countries and during the sovereign debt crisis. Second, contagion varies across time and countries. Third, similarities in economic fundamentals, cross-country linkages in banking and common market sentiment constitute the main channels of contagion.
Read article
18.10.2016 • 46/2016
No Sign of Price Distortions – Lack of Evidence for Effects of US Bank Bailouts
There has been much political and public controversy surrounding the very large rescue packages offered to the banking sector in the course of the financial crisis of 2007 to 2009. The aim of the packages was to stabilise the financial sector and, therefore, the development of the real economy. The downsides of these bailouts were the enormous financial cost to the taxpayer, increased assumption of risk by the government and possible distortive effects on competition in the banking market – since not all banks were given financial support. Researchers at the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association led by Professor Felix Noth have now studied the long-term, indirect and possible market-distorting effects of the US rescue packages.
Felix Noth
Read
On the Distribution of Refugees in the EU
Oliver Holtemöller, Axel Lindner, Andreas Schmalzbauer, Götz Zeddies
Intereconomics,
No. 4,
2016
Abstract
The current situation regarding the migration of refugees can only be handled efficiently through closer international cooperation in the field of asylum policy. From an economic point of view, it would be reasonable to distribute incoming refugees among all EU countries according to a distribution key that reflects differences in the costs of integration in the individual countries. An efficient distribution would even out the marginal costs of integrating refugees. In order to reach a political agreement, the key for distributing refugees should be complemented by compensation payments that distribute the costs of integration among countries. The key for distributing refugees presented by the EU Commission takes account of appropriate factors in principle, but it is unclear in terms of detail. The compensation payments for countries that should take relatively high numbers of refugees for cost efficiency reasons should be financed by reallocating resources within the EU budget.
Read article
