International Economics and Economic Outlook After the sovereign debt crisis in the euro area and the Brexit referendum, priority must be given to putting economic policy in Europe on an optimal course without setting the wrong long-term incentives. One of the key questions is whether deeper integration is really essential for bringing stability to the euro area. Moreover, the EU needs to sort out its future, particularly regarding issues like a more variable geometry, the EU budget and its regional policy.
In addition, our researchers analyse the business cycle and investigate other macroeconomic issues. For example, given the demografic change and the currently slow productivity growth, we examine the prospects for growth and investment in Germany, Europe and the world. This is an issue closely connected with the future viability of the German business model with its heavy bias towards exports.
The economists in this research unit also take an active part in economic policy debates, be it discussion of the German current account surplus, Germany’s attractiveness as a location for investment or the threat to open markets by Brexit and Trumponomics.
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Sections of the Research Unit
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Current topics in this policy area include Brexit, the consequences of globalisation, as well as German and European competitiveness.
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The research unit leads and contributes to the IW’s semi-annual economic outlook for Germany and the international economy. Furthermore, we analyse economic growth and structural change from a macroeconomic perspective.
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Current topics in this policy area include Brexit, the consequences of globalisation, as well as German and European competitiveness.
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Cooperation Partners
Association of European Conjuncture Institutes (AIECE)
International Network for Economic Research (INFER)
The European Union is facing one of its biggest crises since the financial crisis of 2008. The pandemic started in 2020 and led to a historical economic downturn in the second quarter of that year.
Do Family Businesses Shape Political Voting Behaviour in Germany?
Björn Kauder
In recent years family businesses have become an object of research in their own right. Indeed, it has been shown that, far from developing less dynamically than other firms, as once assumed, family businesses actually outperform their peers.
EU/China/USA- three bloc systemic conflict: Digital policies as trade barriers?!
European companies operate world-wide within international value-chains, networks and ecosystems. However, the world is changing for geopolitical reasons. Increasingly, it becomes divided into large blocks with the EU, the United States and China at the forefront.
Mutual dependence in trade between China, the EU and Germany
Jürgen Matthes
An inventory of the mutual dependencies in foreign trade between the EU and Germany on the one hand and China and Russia on the other is necessary in order to be able to make political deductions in these times of “Zeitenwende” on a sound empirical basis.
Rewarding conservative politicians?: Evidence from voting on same-sex marriage
Björn Kauder / Niklas Potrafke in Public Choice
We ask whether voters rewarded conservative politicians who voted in favor of same-sex marriage. The evidence is based on a rollcall vote in the German national parliament (Bundestag) in June 2017.
Björn Kauder / Niklas Potrafke in Public Choice IW
The Productivity Effects of Capital Formation in Germany
Michael Grömling
Despite broad-based digitalisation, productivity advances in Germany in recent years have been considerably lower than in previous decades. This paper conducts a growth accounting which points to steeply declining stimuli from technical progress and especially from capital formation.
Contrary to what the German government seems to be aiming for, a reform of the Stability and Growth Pact (SGP) is necessary. The debt reduction rule forces highly indebted euro countries to reduce their debt too quickly and too damagingly for growth.
The European Commission is planning a new regulation for mandatory human rights and environmental due diligence (Due Diligence Directive) as part of the Sustainable Corporate Governance initiative. The long-awaited EU proposal is expected to have requirements that go far beyond the German Act on Due Diligence in Supply Chains (the so-called Lieferkettensorgfaltspflichtengesetz), which was regarded as a possible blueprint for a European solution. The present paper contributes to the debate on an EU due diligence regulation by presenting results of a recent survey conducted by the German Economic Institute (IW) on the potential impact of the already adopted German Act on Due Diligence in Supply Chains.
The new year has come with some mixed news for the data economy. With the EU’s Data Governance Act (DGA) being approved, the Digital Services and Markets Acts (DSA & DMA) at a developed stage of the legislative process, the EU is marching ahead in its ambition to create a strategy for a data economy.
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