Press Releases

Current and older Press Releases of DIW Berlin
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15 December 2004

Employment Structure of East European EU Countries prior to Further Adaptation to Western Europe

The employment structures of East European EU countries and entry candidates are still markedly different from market economies with a per capita income as that in West European countries. This is the conclusion of an analysis published in the latest Weekly Report of DIW Berlin 51/2004. Using a data record for market economies at various levels of development, a standard unit for comparison („benchmarks“) was defined for the new East European EU countries, which allows to assess structural changes and can also be used for future simulation. According to this benchmark, there will be a significant rise in relative employment in the construction, trade and financial sectors, as well as in the public sector, social services and other private services until 2015. Even though the employment rate in the financial sector is already high, noticeable increases can partially be expected if the per capita income of the population continues to increase. Furthermore, in all East European EU countries, except Poland, continuous relative job reductions in the processing industries are to be expected, even more so in Slovenia and in the Czech Republic. As far as Poland is concerned, slight job increases in this sector are foreseen. Massive job cuts in the agricultural sector are to be taken into account, especially in Poland, Lithuania and Latvia.

8 December 2004

Upswing in Industrial Output carried by Foreign Trade

According to the latest weekly report of DIW Berlin 50/2004, against the background of an overall positive development in 2005 in Europe and also in Germany, German industrial output will continue to substantially increase, achieving a good 3% growth (adjusted to 3,7% per working day). In 2004, German industrial output increased more than originally expected; the 2003 level should exceed 2004 by 4% (adjusted to 2,9% per working day). In spite of high euro rates against the US dollar, foreign demand has considerably increased.

1 December 2004

European Stability and Growth Pact in need of reform - DIW proposes various solutions in Quarterly Journal of Economic Research

The European Stability and Growth Pact as a major instrument of political-economic discipline is in need of reform. This is the key conclusion presented in the latest issue of the Quarterly Journal of Economic Research published by DIW Berlin. Under the title On the Future of the Stability and Growth Pact, renowned economists analyze the weaknesses of the pact based on present experiences, and expound numerous suggestions for reform.

1 December 2004

Alfred Steinherr appointed Acting Head of Department of Macro Analysis and Forecasting

From January 1, 2005 on, Prof. Dr. Alfred Steinherr will act as interim Head of Department of Macro Analysis and Forecasting at DIW Berlin. Steinherr (60) will fulfill this function in addition to his position as Chief Economist at the European Investment Bank (EIB). Alfred Steinherr has served as Chief Economist at the EIB since 1995. Prof. Dr. Klaus F. Zimmermann, President of DIW Berlin, said: “We are very delighted that we were able to engage an internationally renowned economist with excellent macro-economic competencies like Alfred Steinherr. He has intense and widespread experience in the fields of political consulting and research, and furthermore has outstandingly published in scientific journals. Alfred Steinherr will act as Head of Department of Macro Analysis and Forecasting until the future Head of Department will have been nominated and he will consult with the Recruitment Committee with regard to the applicants.” Alfred Steinherr added: “It is a great challenge. I’m happy to get the chance to be part of this important change process in Germany and at DIW Berlin.”

24 November 2004

Medical technology: an innovative market with growth potential

The German medical-technology industry ranks first throughout Europe. On a world-wide basis, it is in 3rd place behind the USA and Japan according to the current weekly report of DIW Berlin 48/2004. The sales volume in the medical technology sector increased by 5.5 percent from 1995 to 2003 and is, as a result, significantly higher than the average of the manufacturing sector overall. World trade in medical technology increased by seven percent in the period from 1995 to 2001 - valued in US dollars - and is therefore twice as strong as trade in industrial goods. This indicates that the internationalization of the market for medical technology is further advanced. The proportionate shares in world trade have undergone a significant shift here: The USA notched up a positive change of four percent and therefore controls more than one-third of the world market. The proportionate share of Germany in world trade dropped by 3.5 percent to 12.8 percent, in contrast. These shifts are influenced to a considerable degree by changes in the exchange rates among the US dollar, the yen and the euro, though.

4 November 2004

European Researchers are Tracking Down Productivity

The European Commission gave a consortium of European research institutes the task of researching productivity in the European Union. DIW Berlin will be responsible for the development of measures of productivity for Germany as part of this consortium and will carry out analyses in the areas of productivity, technology, the labor market and investment.

27 October 2004

Energy prices on the rise

The recent sharp increase in energy prices has been caused by a combination of different developments: upheaval on the world oil market, its impact on other energy markets, increases in energy prices motivated by environmental policy, and delays in liberalisation and regulation in the area of electricity and gas supplies. In its current Weekly Report (Wochenbericht 44/2004), the DIW Berlin analyses the causes of the price increase in the individual energy sectors.

26 October 2004

Improved Labor Market Chances through Social Networks

The question of whether unemployment will remain a brief phase in one’s career or evolve into a long-term condition depends not only on the overall economic situation—as determined by such reforms as Hartz IV—but also on the personal and social characteristics of unemployed individuals themselves. A recently released DIW Berlin study entitled “The influence of personality characteristics and social resources on the duration of unemployment”, based on empirical data from the longitudinal study Socio-economic Panel (SOEP), finds evidence of different influences of these personal and social characteristics between the former East and West German states.

19 October 2004

Guest workers from the EU successful in Germany

Immigrants to Germany from EU countries succeed in achieving a social situation comparable with German-born individuals, and in some cases even better. Immigrants from other non-EU countries, however, do not. The percentage of unskilled and low-skilled workers among all immigrant groups is, at 43%, significantly higher than the percentage of these workers among individuals born in Germany (12%). However, immigrants from the EU and naturalized citizens together achieve a middle-income level comparable to that of German-born individuals. These are the central findings of the recently released study entitled “Migration and social structure – social situations of immigrants in Germany in the context of European unification” (in German), which is based on empirical data from the representative longitudinal study SOEP.

For this analysis, Stefanie Kley analyzed SOEP longitudinal data from the years 1991 and 1999, studying specific characteristics at both individual and household levels. The study shows how the image of immigrants as “cheap labor” came into being, and the extent to which immigrants still belong to the lower income strata in Germany. For her master’s thesis, Stefanie Kley received the prize for excellent final theses awarded at the 32nd conference of the German Society for Sociology (DGS). A monograph of this study published by Logos Verlag Berlin is forthcoming.

19 October 2004

The State of the World Economy and the German Economy in the Autumn of 2004

The word economy continues to be strong, but since spring 2004 the upswing has been losing some of its momentum, partly because economic policies have become less ex-pansive. Although the monetary conditions remained highly supportive, fiscal impulses in the US have diminished and the other global driving force, China, has been taking administrative steps to cool off the economy. In addition, the high oil prices have further hampered economic activity; up to now they have reached new record levels. Especially private consumption was negatively affected by the oil market developments. On the other hand, corporate investment, supported by the still expansive monetary policy, has gained more and more momentum and has been expanded vigorously. Throughout the forecasting period, in the face of increased economic activity, monetary policy will adhere to its slow tightening path, but will continue to support the economy, albeit to a decreasing degree. In addition, no more stimuli from fiscal policy can be ex-pected for 2005 in the US, where economic activity will expand at a slower rate. In Ja-pan, weaker exports will be counteracted by stronger domestic demand. The compara-tively modest economic expansion in the European Union will continue. Overall world GDP should increase by 3.2 % in 2005, after rising by 3.9 % this year. The economy seems to be strong enough to weather the negative effects of the strong oil prices gains and the reduction of economic policy stimuli. Hence, as long as oil prices do not in-crease much further, a decline into recession is not expected.

29 September 2004

Germany not a bazaar economy

Value added has risen in Germany over the last ten years as a result of external trade. Consequently, according to the current DIW Berlin Weekly Report (Wochenbericht 40/2004), foreign trade has stabilized economic growth in Germany. The authors’ calculations are based on changes in the real external balance, which has increased by around 25 billion euro over the last ten years. The real external balance is equal to the difference between real exports and real imports and comprehends the value added produced by all sectors of the economy. Seen in comparison to the rest of the EU, Germany has the highest external balance of all the large EU countries.

22 September 2004

Junior Professorship strengthens Germany's Position as a Research Location

Following the reform of the Higher Education Act in 2002, the junior professorship was to become the only possible route for young academics seeking to qualify for tenure and was thus intended to replace Germany’s habilitation procedure. This plan was frustrated by the Constitutional Court in July 2004 even though, as outlined in the current DIW Berlin Weekly Report (Wochenbericht 39/2004), the introduction of junior professorships on a national basis would have distinct advantages for the economy. The junior professorship enables young scientists to embark on independent research at a young age, which raises their research productivity and also increases Germany’s attractiveness for young researchers from at home and abroad. A total of 900 junior professorships have been created to date at 65 universities throughout Germany and two thirds of these positions have already been filled. If the habilitation procedure remains in place alongside junior professorships in the long term, however, the advantages of the latter system will be forfeited. This is the situation threatened by the Constitutional Court decision.

8 September 2004

Department of International Economics

The Executive Board of DIW Berlin is happy to announce that the Appointment Commission of DIW Berlin selected Associate Professor Peter Egger (University of Innsbruck) as first choice candidate for the position as Head of Department of International Economics.

25 August 2004

Learning Regions Programme: Aid Tailored to Local Conditions

According to the current DIW Berlin Weekly Report (Wochenbericht 35/2004), it is likely that networks operating in attractive regional environments have a more positive influence on local learning and innovation processes than networks operating in less favourable economic environments with weak labour markets. This issue of the Wochenbericht studies the “Learning Regions – Providing Support for Networks” programme, which is funded by the Federal Ministry of Education and Research (BMBF) and is currently providing support to 73 networks in different regions and regional contexts in an effort to generate a new learning culture.

5 August 2004

The Economics of Corruption: New issue of the DIW Berlin’s Quarterly Journal of Economic Research

The current issue (2/2004) of the Quarterly Journal of Economic Research (Vierteljahrsheft zur Wirtschaftsforschung) illustrates the considerable progress made in the field of corruption research over the last 10 years. This research indicates that it is possible both to explain and to influence the degree of corruption in a given society. Corruption is not a consequence of an immutable “cultural” disposition, and it is not only a moral issue. Rather more than anything else it is a question of incentives. Corruption causes considerable harm to an economy, but the victims remain unaware of the problem unless they are informed by media reports. On 7 February 2004, the “Initiative Nachrichtenaufklärung” and the Recherche Network presented their Top Ten of neglected news topics for 2003. The topic selected by the jury as the most important issue neglected by the news media last year was “Corruption: Bribery Amongst German Companies Abroad”.

23 July 2004

New Managing Director at the DIW Berlin

DIW Berlin has a new Managing Director. The vacancy at the Berlin Institute will be filled by Dr. Susanne Maria Schmidt on 1 January 2005. The 32-year-old Doctor of Economics has already been acting Managing Director of the Institute since 1 September 2003.

26 May 2004

Pension insurance: Decline in satisfaction and sceptical view of private provision

The Socio-Economic Panel (SOEP) survey conducted by the DIW Berlin and the Infratest Social Research Institute shows a sharp decline between 1992 and 2002 in the working-age population’s satisfaction with retirement insurance. According to figures published in the current DIW Berlin Weekly Report (Wochenbericht 22/2004), the share of satisfied respondents fell during this period from 37% to 25%, while the share of dissatisfied respondents rose from 30% to over 40%.

19 May 2004

Confidence in Germany: High levels of mistrust towards large businesses and trade unions

A special survey conducted by the DIW Berlin’s Socio-Economic Panel, in cooperation with Infratest Sozialforschung, indicates signs of a crisis of confidence in Germany, notes DIW Berlin’s Weekly Report, No. 21/2004. Confidence in politics (i.e., the Bundestag) has been largely eroded; moreover, the level of confidence in big business and the trade unions is also low. This scenario is all the more disturbing since confidence in the private sphere continues to remain more or less intact, with levels of trust in family and friends standing at over 90%. Neighbours and colleagues, too, enjoy the trust of more than two-thirds of those surveyed.

19 May 2004

Professional Mobility in Germany on the Rise

Germany’s labour market flexibility has risen in the past 10 years, according to findings published in DIW Berlin’s current Weekly Report (21/2004). Calculations by the Institute’s Socio-Economic Panel (SOEP) for the period 1992 to 2002 have found that the number of those starting a new job within one year has risen by more than 30%, to almost 6.3 million persons. Given the falling number of employed persons overall, this dynamism is generated in particular by women and young people.

27 April 2004

The State of the World Economy and the German Economy - Spring 2004

A global economic upturn is unfolding. Since mid-2003 production has been expanding rapidly in many countries and capacity utilisation has been rising. The upswing is centred in North America and in East Asia. Its robustness is evidenced by the marked increase in investment and in the fact that the optimistic mood in the stock market was not lastingly impaired either by the most recent terrorist acts or by the renewed worsening of the situation in Iraq. Investment was favourably affected by monetary policy: The U.S. Federal Reserve, the Bank of Japan and also the European Central Bank have maintained an expansionary stance for some time. Internationally the costs of external financing are low, in nominal as well as in real terms. All this has bolstered expected sales, not least in the information and communications industry. The latter was particularly hard hit in the recession in 2001 and product innovations have now given rise to higher demand. After a rapid expansion in the first half of this year the upswing in the international growth regions will become somewhat less strong.

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