Press Releases

Current and older Press Releases of DIW Berlin
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21 August 2002

DIW Berlin: Sobering results of international climate protection policy, emissions still far above targets

The DIW Berlin's current weekly report 34/2002 discusses the sobering conclusions that will be drawn by the countries participating in the World Summit on Sustainable Development in Johannesburg next Monday. Above all it is the industrial states that carry the majority of responsibility for the climatic problems, and they have not yet managed to reduce or even stabilise their greenhouse gas emissions. Only the reduction in emissions by the transition countries of Central and Eastern Europe in the 1990s has helped reduce total emissions, although this development was by no means the result of successfully implemented climate protection measures. Regarding the further increase in emissions in developing countries, there are still no prospects for a sustainable reduction in emissions on a global level.

14 August 2002

Weak economic climate in the first half year.
DIW Berlin: Increasing impact of the domestic economy in the third quarter of 2002

In its current weekly report 33/2002, the DIW Berlin reports only a slight upward trend in overall economic performance in the second quarter of 2002, as was the case in the first quarter of this year. The seasonally adjusted real gross domestic product increased by 0.2%, which exceeded the previous year's level by 0.4%. The lack of stronger expansion is mainly attributable to private households, which, for the fourth successive quarter, reduced real consumption. The considerable decline in building investments also had a negative effect on the economy. Exports, however, increased further, although less dynamically than in the first quarter. The sharp decline in investment in new equipment bottomed out at the end of 2000, which also had a positive effect on the economy.

31 July 2002

Reform of local authorities' finances absolutely necessary. DIW Berlin: Crisis in the financial and investment sector compels local authorities to act

The DIW Berlin reports a decline in investment activities, the main result of substantial financial problems at the local level, according to the current DIW Wochenbericht. Local finances depend heavily on the Länder, whichhave consolidated their finances over the last few years at the cost of the municipalities. Tax revenues are also performing poorly at the moment. Local budgetary law sets strict limits on borrowings, and as a result, impending budget deficits can only be avoided by quickly reducing expenditures. Thus, investments - as the most flexible form of expenditures - are suffering most severely.

24 July 2002

German attitudes towards the euro: political advantages valued over economic benefits

Prior the introduction of euro notes and coins, German acceptance of the euro was low compared to the other countries participating in monetary union. Some enthusiasm was noted shortly after the notes and coins were introduced, but this, however, subsided in the following weeks. Yet, acceptance of the euro is greater than it was last year: then two-thirds of all Germans were concerned about the introduction of the euro, now only fifty per cent are. Germany is among the countries with the lowest acceptance of the euro within the European Monetary Union.

2 July 2002

Budget consolidation in the Eurozone:
Growth not expenditure reduction decisive

Economic requirements should always be taken into consideration when working to meet the targets set by EU stabilisation programmes. Consolidating budget deficits in the Eurozone in a rapid and sustainable way can only be achieved with high economic growth. The DIW Berlin reached this conclusion in its current weekly report 27/2002. Finland and the Netherlands, two countries who have been especially successful at consolidating their budget deficits, were chosen as an example by the Berlin-based institute in order to refute the opinion that such targets can only be achieved through strict budget cuts.

26 June 2002

Problems for international comparisons
of industrial trends

The production index and real net output, performance indicators for industrial branches, do not provide a realistic enough picture for an international comparison of the performance trends of an industry and its branches to be made. In its current weekly report 26/2002, the DIW Berlin suggests incorporating other information into such evaluations, like employment and investment trends.

12 June 2002

Hesitant economic recovery in Eurozone. DIW Berlin: Noticeable recovery only in 2nd half of year

According to calculations by the DIW Berlin, GDP in the Eurozone increased by 0.3% in the first quarter of 2002; a figure which corresponds to a current annual rate of 1.2%. Last year's weak economic cycle seems to have begun to gradually recede. This slight recovery is mainly attributable to a higher net trade in goods and services; while exports in the Eurozone increased by 1%, imports experienced a marked decrease. Domestic demand components have not really given off any growth impulses so far. Private consumption stagnated during the first quarter; investments continued their downward trend.

5 June 2002

Promoting service agencies for household tasks creates jobs for low qualified workers. DIW Berlin: Proposal from Rhineland-Palatinate could create half a million jobs

Private households are very sensitive to changes in the price of services. This has been proven by analysis based on data collected by the DIW Berlin's Socio-Economic Panel. In its current weekly report 23/2002, the DIW Berlin shows that promoting agencies for household tasks could create employment and make an long-term contribution to the legalisation of illicit work. A legislative initiative recently presented in Rhineland-Palatinate suggests that developing a legal market for household tasks by providing wage cost subsidies and through founding domestic service agencies would create half a million jobs for low qualified workers. If the jobs created were filled by the unemployed, then the net burden on the state and its social security system would only amount to 3.4 billion EURO. Eastern German households, however, do not have large enough demand for domestic services to have a noticeable effect on the reduction of unemployment in eastern Germany

29 May 2002

One in five unemployed people no longer want to work. DIW Berlin: provision of crèche facilities too weak, early retirement incentives too strong

Eighty per cent of those registered unemployed are available for work - although some not straight away. One in five unemployed people, however, no longer want to work. This conclusion was reached by the DIW Berlin in its latest weekly report 22/2002, which presented up-to-date data from surveys by the DIW's Socio-Economic Panel. Sixty per cent of those unemployed would prefer to return to work immediately. This willingness to work increases, if the unemployed are offered jobs which match their requirements: seventy per cent of those unemployed would accept such a job. Distance to the job market is a particularly strong factor for older unemployed people, because they often see unemployment as a transitional stage preceding legal retirement. One fourth of unemployed western German women with children only want to return work at a later date - even if they were offered a job immediately, they would not take it.

22 May 2002

Positive interim balance for the Inno-Regio Programme

Despite initial difficulties, the majority of participants in the Inno-Regio programme (Promotion of Regional Networks for Innovation), which is financed by the Federal Ministry of Education and Research, are pleased. The project promotes 23 innovation networks in the former East Germany. The program aims to improve the previously insufficient level of co-operation between businesses, research institutes and economic institutions on a regional level and thus promote innovation.

22 May 2002

Output decisive for theatre costs in Germany

Theatre costs in Germany largely depend on a theatres' output - productions and performances - and not on a theatres' legal organisation or the sponsorship it receives. This conclusion was reached by the DIW Berlin in its current weekly report 21/2002. However, it is quite surprising that the higher the number of new productions is the lower the costs are. A high percentage of new productions is characteristic for en-suite runs (only one play is staged at a time). En-suite runs seems to be much more cost effective than repertoire theatre in which several plays run consecutively. En-suite runs are mainly found in eastern Germany; eastern German theatre performances are therefore much cheaper than western German ones. Theatre costs also depend on the number of private theatres nearby. The more private theatres there are in the vicinity of public ones, the higher costs are for public theatres. This is because competition for artists forces up fees.

14 May 2002

No economic upswing at start of this year First results from the national income and product account for the first quarter of 2002 and a forecast for the second quarter

At the beginning of this year, economic growth once again failed to exhibit any dynamism. Real gross domestic product turned out to be stagnant (-0.1%) compared to the previous quarter. This was largely due to a weak domestic demand; but above all to heavily declining investments in new equipment. Although import figures decreased, higher export rates prevented a further decline in economic growth. Compared to the previous quarter, retail prices experienced a slight increase of 0.7% during the first quarter of this year. This can be attributed to an increase in taxes that took effect at the beginning of this year as well as to an increase in prices, which mainly took place in the consumer sector (i.e. restaurants or personal services); the introduction of the Euro was largely responsible for this price increase, although there was also a upward movement in the price of fruit and vegetables in January.

7 May 2002

Labour Market Policy: Taking Regional Variations into Account

Results of international workshop held by DIW Berlin 11th-13th April 2002

7 May 2002

Above average participation in Military Service for Abitur Students and the unemployed

Analysing data from the DIW Berlin's Socio-Economic Panel Study (SOEP) shows that Abitur students and the unemployed are more likely than others to take part in military service or its community service equivalent. Abitur students should theoretically be more interested in avoiding military or community service, because their relatively high level of qualifications increases the chance of gaining a higher income and thus doing military service would lead to higher income losses. This hypothesis, however, cannot be confirmed by the empirical evidence.

23 April 2002

The State of the World Economy and the German Economy in Spring 2002

The world economy is currently at the beginning of an upswing. Output in the U.S. has started to recover even earlier than had been expected by the Institutes. In Western Europe, while the rise in production was still modest in the first months of the year, consumer confidence as well as business climate improved markedly. Also in the Asian NICs the cyclical bottom has been passed; Japan, by contrast, continued to be in recession.
Weekly Report/ Wochenbericht 17/2002

10 April 2002

Prices for Crude Oil: Between Hope for Business Revival and Fear of War. DIW Berlin: 20 to 25 US-Dollar per barrel if the situation eases off in the Middle East

Signs of a nascent economic recovery in the USA and in Europe, the increasing willingness of the OPEC-countries to stick to the quota, and speculations on a possible US military intervention in Iraq, which would consequently result in a restricted oil supply, have led to an unexpected drastic rise in prices for crude oil in the first quarter of 2002. Prices for crude oil had already topped 27 US-dollar per barrel at the beginning of April. In its current weekly report 15/2002 (Wochenbericht 15/2002), the DIW Berlin states that if the situation eases off in the Middle East, prices for crude oil should fall slightly (to 20 - 25 US-dollars per barrel). The Berlin-based institute reasons that this development would be mainly attributable to remaining stocks and the seasonal decrease in oil consumption in the second quarter of the year. However, if the crisis in the Middle East were to escalate, a further increase in prices, even up to over 30 dollars, would become likely.

10 April 2002

Reform of the ECB's Governing Council and EU Enlargement. DIW Berlin argues for an adjustment of its decision-making structure

A further possible ten countries could be EU members by 2004. The EU accession countries will automatically become members of the Eurozone a few years after this, if they comply with the criteria stipulated in the Maastricht Treaty. In its current weekly report 15/2001, the DIW Berlin points out that if the European Central Bank (ECB) were to keep its present decision-making structure, it would in future not be able to react swiftly to the monetary requirements of an enlarged Eurozone. As the ECB's Governing Council runs in practice on the principle of unanimity, the imbalance between voting rights and the population or economic size of member countries - which support the voting rights - would further increase. The DIW Berlin therefore argues for a thorough reform of the ECB' s Governing Council: the seven largest countries should be represented in the Council by one delegate each; the smaller countries should form groups, with each group being represented by one delegate, who changes annually on a rotation basis. However, the necessary decisions must be taken before 2004, as it would be much more difficult to reach agreement on such a political decision after EU enlargement had already taken place. In its report, the DIW also states that the accession of countries to the EU, which have a retarded economic development, will not affect the ECB' s monetary policy, as the EU accession countries' influence on the consumer price index is only marginal.

3 April 2002

Japan: a way out of the crisis. DIW Berlin's Quarterly Journal on Japan

Japan's overwhelming success story came to an abrupt end when the bubble burst in the 1980s. The Japanese economy has since found itself in a permanent crisis. Its economic situation has been characterised by deflation. Despite all political attempts, domestic demand has not recovered. In its latest volume of the Quarterly Journal of Economic Research Japan: How to overcome the Difficult Decade?, the DIW Berlin comprehensively analyses the possibilities and limitations of Japanese reform policy for the first time; both Japan's macro-policy and its recent structural reforms in the business and banking sector and the social welfare system are examined.

27 March 2002

Great Britain could join the European Monetary Union.
DIW Berlin: the pound would then have to be markedly devalued

From an economic point of view, Great Britain's accession to the European Monetary Union is neither a great risk for the country itself nor for the current members of EMU. This conclusion was reached by the DIW Berlin in its current weekly report 13/2002 - 14/2002. However, the most difficult problem would be to fix an adequate exchange rate for the pound, which was neither a burden to Great Britain nor the European Economic Union. At the current exchange rate of between 1,60 euro and 1,65 euro, the DIW Berlin is of the opinion that the pound should be devalued by up to 20%, in order to strengthen Britain's competitiveness. In all other areas, Great Britain has already begun to converge towards Europe.

20 March 2002

Argentina: no long-term solution provided by free floatation of the peso. DIW Berlin recommends exchange rate bands

By allowing the peso to float freely at the beginning of this year, Argentina fundamentally changed its monetary policy. For the previous eleven years, the peso had been pegged to the US-Dollar by a currency board. In its current weekly report 12/2002, the DIW Berlin warns against this strategy. It also does not consider the free floatation of the peso to be a workable solution. The DIW instead suggests that a middle course: an exchange rate system, whic allows the exchange rate to fluctuate within a certain band similar to the former European Monetary System (EMS). On the one hand, this measure would contribute to a stable monetary policy. On the other hand, it would allow the central bank to devalue the peso in times of crisis and of considerable structural upheaval or to reduce the pressure on the peso through joint interventions. Argentina should co-operate with Brazil and the other Mercosur countries, with whose national economies it has extremely close trade relations and with whom Argentina could reach a credible agreement on price stability.

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