Alumni
IWH Alumni The IWH maintains contact with its former employees worldwide. We involve our alumni in our work and keep them informed, for example, with a newsletter. We also plan…
See page
East Germany
The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the West Dossier In a nutshell The East German economic convergence process is hardly…
See page
13.04.2022 • 8/2022
From Pandemic to Energy Crisis: Economy and Politics under Permanent Stress
The German economy is steering through difficult waters and faces the highest inflation rates in decades. In their spring report, the leading German economic research institutes revise their outlook for this year significantly downward. The recovery from the COVID-19 crisis is slowing down as a result of the war in Ukraine, but remains on track. The institutes expect GDP to increase by 2.7% and 3.1% in 2022 and 2023 respectively. In the event of an immediate interruption to Russian gas supplies, a total of 220 billion euros in German economic output would be at risk in both years.
Oliver Holtemöller
Read
Wages and the Value of Nonemployment
Simon Jäger, Benjamin Schoefer, Samuel Young, Josef Zweimüller
Quarterly Journal of Economics,
No. 4,
2020
Abstract
Nonemployment is often posited as a worker’s outside option in wage-setting models such as bargaining and wage posting. The value of nonemployment is therefore a key determinant of wages. We measure the wage effect of changes in the value of nonemployment among initially employed workers. Our quasi-experimental variation in the value of nonemployment arises from four large reforms of unemployment insurance (UI) benefit levels in Austria. We document that wages are insensitive to UI benefit changes: point estimates imply a wage response of less than $0.01 per $1.00 UI benefit increase, and we can reject sensitivities larger than $0.03. The insensitivity holds even among workers with low wages and high predicted unemployment duration, and among job switchers hired out of unemployment. The insensitivity of wages to the nonemployment value presents a puzzle to the widely used Nash bargaining model, which predicts a sensitivity of $0.24–$0.48. Our evidence supports wage-setting models that insulate wages from the value of nonemployment.
Read article
Explaining Wage Losses after Job Displacement: Employer Size and Lost Firm Rents
Daniel Fackler, Steffen Müller, Jens Stegmaier
Abstract
Why does job displacement, e.g., following import competition, technological change, or economic downturns, result in permanent wage losses? The job displacement literature is silent on whether wage losses after job displacement are driven by lost firm wage premiums or worker productivity depreciations. We therefore estimate losses in wages and firm wage premiums. Premiums are measured as firm effects from a two-way fixed-effects approach, as described in Abowd, Kramarz, and Margolis (1999). Using German administrative data, we find that wage losses are, on average, fully explained by losses in firm wage premiums and that premium losses are largely permanent. We show that losses in wages and premiums are minor for workers displaced from small plants and strongly increase with pre-displacement firm size, which provides an explanation for the large and persistent wage losses that have been found in previous studies mostly focusing on displacement from large employers.
Read article
Direct and Indirect Effects of Economic Sanctions between the EU and Russia on Output and Employment in the German Economy
Jutta Günther, Maria Kristalova, Udo Ludwig
Russland-Analysen,
No. 325,
2016
Abstract
In der Mitte des Jahres 2014 verhängten die EU und Russland infolge des Ukrainekonfliktes gegenseitige Sanktionen. Die bereits seit 2013 abnehmenden Warenexporte Deutschlands nach Russland brachen danach noch tiefer ein. Dieser Beitrag schätzt unter Verwendung der kürzlich vom Statistischen Bundesamt veröffentlichten Input-Output Tabellen für das Jahr 2012 die ökonomischen Folgen der Sanktionen für die Produktion und Beschäftigung in Deutschland. Dabei gehen sowohl die direkten als auch die indirekten Effekte entlang der gesamten Wertschöpfungskette in die Analyse ein. Die Produktionsverluste infolge der Sanktionen liegen kumuliert über die Jahre 2014 bis 2016 bei mehreren Milliarden. Bezogen auf die Bruttowertschöpfung entsprechen die Verluste aber »nur« 0,15 Prozent des Bruttoinlandsprodukts. Starke Verluste erleiden jedoch die Hersteller unmittelbar sanktionierter Warengruppen und deren Zulieferer, insbesondere der Fahrzeugbau, der Maschinenbau und die Erzeuger von Eisen und Stahl.
Read article
Foreign Direct Investment: The Role of Institutional and Cultural Determinants
Stefan Eichler, N. Lucke
Applied Economics,
No. 11,
2016
Abstract
Using panel data for 29 source and 65 host countries in the period 1995–2009, we examine the determinants of bilateral FDI stocks, focusing on institutional and cultural factors. The results reveal that institutional and cultural distance is important and that FDI has a predominantly regional aspect. FDI to developing countries is positively affected by better institutions in the host country, while foreign investors prefer to invest in developed countries that are more corrupt and politically unstable compared to home. The results indicate that foreign investors prefer to invest in countries with less diverse societies than their own.
Read article
Demographie und Einwanderung
Reint E. Gropp
Wirtschaft im Wandel,
No. 4,
2015
Abstract
Die demographischen Effekte sind in Ostdeutschland viel drastischer als in Westdeutschland und viel gravierender auf dem Land als in der Stadt. Die Bevölkerung in Ostdeutschland schrumpft schneller als im Westen, und sie wird immer älter. Manchen Regionen droht die Entvölkerung. Nach Prognosen des Statistischen Bundesamts ist im Jahr 2030 jeder dritte Ostdeutsche 65 Jahre und älter. Der Umgang mit diesem Problem, gerade im Osten, wird in meinen Augen die größte Herausforderung der nächsten Jahrzehnte sein.
Read article
Binnenwirtschaft trägt Konjunktur in Deutschland
Wirtschaft im Wandel,
No. 1,
2014
Abstract
In diesem Artikel wird die Konjunkturprognose des IWH vom 12. Dezember 2013 zusammenfassend dargestellt. Die Weltwirtschaft dürfte im Jahr 2014 in moderatem Tempo expandieren. Die wirtschaftliche Erholung im Euroraum bleibt schleppend. In Deutschland setzt sich dagegen der im Frühjahr 2013 begonnene Aufschwung fort. Er wird von der binnenwirtschaftlichen Nachfrage getragen. Das Bruttoinlandsprodukt dürfte im Jahr 2014 um 1,8% (66%-Prognoseintervall: 1,0% bis 2,7%) zulegen, nach 0,4% im Jahr 2013. Die Arbeitslosenquote sinkt leicht auf 6,5%, die Verbraucherpreise steigen wie schon 2013 um 1,5%. Der Finanzierungssaldo des Staates nimmt konjunkturbedingt noch etwas zu, auf 0,3% im Jahr 2014.
Read article
Estimating Monetary Policy Rules when the Zero Lower Bound on Nominal Interest Rates is Approached
Konstantin Kiesel, M. H. Wolters
Kiel Working Papers, No. 1898,
2014
Abstract
Monetary policy rule parameters estimated with conventional estimation techniques can be severely biased if the estimation sample includes periods of low interest rates. Nominal interest rates cannot be negative, so that censored regression methods like Tobit estimation have to be used to achieve unbiased estimates. We use IV-Tobit regression to estimate monetary policy responses for Japan, the US and the Euro area. The estimation results show that the bias of conventional estimation methods is sizeable for the inflation response parameter, while it is very small for the output gap response and the interest rate smoothing parameter. We demonstrate how IV-Tobit estimation can be used to study how policy responses change when the zero lower bound is approached. Further, we show how one can use the IV-Tobit approach to distinguish between desired policy responses, that the central bank would implement if there was no zero lower bound, and the actual ones and provide estimates of both.
Read article
