Press Releases

Current and older Press Releases of DIW Berlin
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20 May 2016

Private versus public utilities: no overarching trend toward remunicipalization, no differences in efficiency

DIW Berlin conducted two studies on developments in energy supply – private utilities no more efficient than public utilities – consolidation in drinking water sector offers little benefit

More and more cities and municipalities in Germany are once again taking the electricity, gas, and heating utilities into their own hands: between 2003 and 2012, the number of public utilities increased by 17 percent. Yet the number of private utilities increased by 49 percent over the same period—nearly three times as much. These are the findings of a new study conducted by the German Institute for Economic Research (DIW Berlin).

"There is a no evidence that remunicipalization is displacing private energy companies," explains Astrid Cullmann, Research Associate in the Department of Firms and Markets at DIW Berlin. Together with colleagues Maria Nieswand, Stefan Seifert, and Caroline Stiel, Cullmann evaluated newly available data on energy statistics; financial statements from public funds, institutions, and enterprises; and information from the business register. Even the corporate turnover offers no indication of a remunicipalization, and in fact, public utilities have actually lost revenue shares: in 2012 they generated only slightly more than one-quarter of sales in the energy sector, even though they made up the majority of companies. 

6 May 2016

Decline of middle class in Germany comparable to that of the US

Please note: this is a corrected version of the original press release.

DIW Berlin study compares proportion of middle-class individuals over time in Germany and US - share declining in both countries - average income has dropped since 2000

The middle class in both the US and Germany is on the decline: according to a study conducted by the German Institute for Economic Research (DIW Berlin), the share of middle-class individuals in the total population sank in both countries by more than five percent between 1991 and 2013. The “middle class” comprises all adults whose total household income—before taxes and social security contributions—falls between 67 and 200 percent of the median, which separates the higher-income half from the lower-income half of the population.

6 May 2016

CORRECTION | Decline of middle class in Germany comparable to that of the US

Correction to the press release from May 6, 2016

Please note: The original version of Wochenbericht 18, which compares the decline of the middle class in Germany and with that of the United States, contained a calculation error that came about while adjusting standard German reference values to the basis used by the reference study for the US. We apologize for the oversight.  

We have recalculated these figures and are re-releasing the corrected Wochenbericht. The revised figures are shown here in bold. Additional explanations of the different measurement methods can be found at the end of this press release.

The key finding of the report remains unchanged: the German and US middle classes are shrinking at roughly the same pace. An application of the method commonly used in Germany and in previous DIW Wochenberichten reveals a similar development. For comparison purposes, the resulting calculations can also be found in the table at the end of this press release.  

3 May 2016

High-earners in Europe more likely to inherit wealth

DIW study: in several European countries prior to 2010, between 27 and 40 percent of households received inheritances or gifts – German tax policy regarding inheritances and gifts riddled with exceptions

High-income individuals are more likely to inherit wealth than are low-income individuals; they also receive significantly larger amounts. Those from privileged social backgrounds are also able to amass more wealth overall, since they have access to higher-paying jobs. This is the result of a new study conducted by the German Institute for Economic Research (DIW Berlin) and commissioned by the Hans-Böckler Foundation. The study appears in the DIW Economic Bulletin 17/2016.

22 April 2016

Weak private investment in Germany indicates urgent need for action

Current corporate investment levels hardly surpass pre-crisis levels – Experts Commission’s recommendations for strengthening investment still relevant – additional tax incentives should be considered

Businesses in Germany are still investing too little in their manufacturing facilities. As a new study conducted by the German Institute for Economic Research (DIW Berlin) reveals, 2015’s domestic private investment may have only amounted to pre-crisis levels—even though economic output has been considerably higher. This is not the case in other countries: in the US, for example, gross fixed capital investment is now roughly 14 percent higher than it was in 2007. Even in the German manufacturing industry, investment was subdued: gross investment was not even as high as the depreciation of the existing capital stock. “In the long run, this weak private investment can compromise Germany’s productivity and economic performance,” explains DIW President Marcel Fratzscher.

15 April 2016

Monetary policy lift-off in the United States: so far only a moderate impact, but emerging markets should brace themselves

DIW Berlin claims that the US Federal Reserve’s decision to end its zero interest-rate policy has not caused turbulence in financial markets

According to a recent analysis conducted by the German Institute for Economic Research (DIW Berlin), the interest rate lift-off introduced by the US Federal Reserve at the end of last year has not led to distortions in the financial markets. Financing costs in emerging countries like Mexico and Brazil have been only slightly higher since the rate hike; sudden capital outflows or a fire sale of assets failed to materialize, contrary to initial fears; and even interest rates on the US national debt are hardly higher than they were last year.

29 March 2016

The ANFA debate: No evidence of monetary financing

Greater transparency of the national banks of the euro area would strengthen Eurosystem credibility.
 
The allegation that the European Central Bank (ECB) is engaging in illegal monetary financing under the guise of ANFA (Agreement on Net Financial Assets) seems to be unfounded—there is simply no evidence for it, claims the German Institute for Economic Research (DIW Berlin) based on their analysis of the national central banks’ balance sheets. But because the data do not clearly refute this accusation either, DIW economists Kerstin Bernoth and Philipp König are advocating for greater transparency: “The fact that the general public has become suspicious of the motives behind the national central banks’ actions carries the risk that monetary policy in the euro area may lose its most important asset: its credibility.”

16 March 2016

German economy back on track, despite some rough waters

DIW Berlin’s forecast: GDP to rise by 1.6 percent in 2016 – robust labor market, wage increases, and refugee expenditure fueling consumption – investment and global economy inhibiting growth

According to the German Institute for Economic Research (DIW Berlin), the German economy is expected to grow by 1.6 percent this year, despite a gloomy global economy. This prognosis is similar to the one made in December 2015. As was the case last year, consumer demand is contributing significantly to this growth: more and more people are taking on employment, and wages are rising noticeably. These factors, as well as the purchasing power gains due to the low energy prices, are fueling private consumption. As well, the expenditure on the care, accommodation, and integration of the refugees is also increasing consumption. However, investment in equipment and machinery has been extremely modest, and has actually experienced some decreases recently. From the spring onward, demand for German exports is likely to increase among many foreign markets. Overall, however, the global economy is exhibiting weak development: this year, global economic output is expected to grow by only slightly more than three percent, which is the slowest it has been since the financial crisis in 2009 (as was the case last year). Many emerging countries that export raw materials are still struggling with low oil prices, and the growth path of the Chinese economy is currently not very promising.

7 March 2016

Germany: Even in two-income households, women who work full time are still doing considerably more housework than their male counterparts - and hardly any changes are in sight

SOEP special analysis for International Women's Day (March 8) reveals that the gender-based division of household labor persists – DIW Research Director Elke Holst calls for stronger, fairer division of unpaid work in the household among couples – a family working-time benefits model (Familienarbeitszeit) and daycare expansion would also support this development

On average, women in dual-income households in Germany are doing more housework and spending more time on childcare than their partners are—even if the woman is working full time. This is the result of a recent study conducted by the German Institute for Economic Research (DIW Berlin) to mark International Women's Day on March 8.

29 February 2016

More German workers would like to work from home - but not enough are permitted to do so

One out of every three workers would prefer to work from home, but only one out of every eight actually does – Germany’s proportion of home workers lags behind that of other European countries – home workers are more satisfied with their jobs – reconciling career and family is not the primary motive

In Germany, only twelve percent of all employees work primarily or even partially from home, even though many employees believe they do not need to be in the office in order to do their jobs. Many more employees would like to work from home—even if only every once in a while—but in most cases, their employers forbid them from doing so. If employers were to reconsider their policies, the proportion of home workers could increase to 30 percent. These are the key findings of a recent study conducted by the German Institute for Economic Research (DIW Berlin) and published in the DIW Economic Bulletin 8/2016.

17 February 2016

ECB’s Policy Measures Stimulate the Economy - Long-term Effects on Wealth Inequality Unclear

European Central Bank (ECB) supports prices, economic activity, and inflation expectations through unconventional measures both in the euro area as a whole and in Germany - but the measures are likely to raise wealth inequality in the short term

The ECB’s ultra-loose monetary policy aimed at easing the financial and debt crisis is making an impact. Prices and GDP have been shored up and inflation expectations stabilized. However, these unconventional measures—particularly the program to purchase government and corporate bonds which began in early 2015—will temporarily increase wealth inequality in the euro area. It is still uncertain whether this distributionary effect will persist in the long term or whether it will be balanced out. These are the findings of two studies published by the German Institute for Economic Research (DIW Berlin) in issue 7(2016) of DIW Economic Bulletin.

10 February 2016

More and more schoolchildren are using paid tutoring – especially those from middle-income households

Proportion of tutored students nearly twice as high as 15 years ago – household income becoming a less influential factor – parental migration background no longer determines participation – nevertheless, educational inequalities persist

More and more schoolchildren in Germany are using private tutoring: 47 percent of the 17-year-olds who were interviewed between 2009 and 2013 reported enlisting the help of paid tutors at least once over the course of their school careers — a figure that is roughly 20 percentage points higher than it was 15 years ago. In 2013, 13 percent of all schoolchildren reported that they had received private out-of-school lessons within the previous six months: this figure amounted to six percent among primary school and 18 percent among secondary school students.

1 February 2016

Inheritances: Abolish Tax Privileges, Reduce Tax Rates

DIW Berlin experts estimate annual value of inheritances and gifts to be between 200 and 300 billion euros – high levels of inequality due to heavy concentration of wealth and largely tax-free transfers of big businesses – experts recommend reducing tax privileges and imposing limited tax rates for business transfers

In 2009, tax privileges for transfers of businesses were expanded; the Federal Constitutional Court then put a stop to the expansion. Now the grand coalition is discussing an inheritance tax reform that would further limit tax privileges in the transferring of big businesses.

20 January 2016

Women executive barometer 2016: Percentage of women among major companies’ top-level positions hardly increases

Researchers analyzed more than 500 companies – some are setting a good example, while others are lagging behind – vast majority of companies have yet to meet the 30-percent quota for women on supervisory boards

A balanced representation of women and men in Germany’s corporate leadership roles is still a long way off: At the end of 2015, the proportion of women on the executive boards of the 200 largest companies stood at just over six percent—an increase of less than one percentage point over the previous year. And even though nearly 20 percent of the positions on the supervisory board were held by women, the growth dynamic has weakened compared to the previous year. These are the results of the German Institute for Economic Research (DIW Berlin)’s latest “Women Executive Barometer,” published in DIW’s current Economic Bulletin. “The development is moving at a snail’s pace,” explains Elke Holst, Research Director for Gender Studies at DIW Berlin. “If the growth rate of the share of women continues to be as low as it is, it will be a long time before an equal participation of women and men has been achieved.” According to DIW’s calculations, if the growth rate of the past ten years were to continue, it would take the top 200 companies another 25 years before an equal number of men and women were serving on their supervisory boards, and another 86 years before an equal number of men and women were serving on their executive boards. “The executive boards in particular are where the share of women remains at such an extremely low level,” says Anja Kirsch, research fellow at the Chair of Labor Politics at Freie Universität Berlin.

17 December 2015

Domestic demand driving German economy

DIW Berlin’s economic forecast: GDP growth will remain stable over the next two years – domestic economy benefiting from favorable labor market situation and expenditure on asylum seekers – public sector has surpluses, but margins are tightening

The German economy is expected to continue in its upward growth over the next two years: According to the latest economic forecasts from the German Institute for Economic Research (DIW Berlin), the GDP is expected to grow by 1.7 percent in the current year, as well as in 2016. In 2017, growth is expected to be slightly lower, at 1.5 percent—but only because there are fewer working days due to the timing of public holidays.

2 December 2015

German construction industry booming despite decline in energy-efficient refurbishment

DIW Berlin’s construction volume calculations: construction industry remains a key pillar of the German economy—need for action in energy-efficient refurbishment and in accommodating refugees

The construction industry remains a key pillar of the German economy: buildings worth a total of around 338 billion euros will have been constructed or modernized in Germany by the end of this year—2.7 percent more than last year. An even greater increase of 3.9 percent to almost 352 billion euros is expected for next year. These figures are taken from the latest construction volume calculations by the German Institute for Economic Research (DIW Berlin). Residential construction in particular is booming: it is predicted to grow by 2.7 percent in 2015 and 2.2 percent in 2016 in real terms. “Interest rates and labor market conditions are both extremely favorable, and demand for housing is high, particularly in urban conurbations,” says one of the authors of the study, Claus Michelsen, Research Associate in the Department of Forecasting and Economic Policy and the Department of Climate Policy at DIW Berlin.

18 November 2015

European climate protection goals can be reached without nuclear power

Photovoltaics and wind power can replace nuclear power – DIW Berlin’s energy experts maintain that a nuclear power renaissance is neither sensible nor necessary – financing for the decommissioning of nuclear power plants and the search for a final storage should be secured through public funds

Europe’s climate protection goals will not be endangered if existing nuclear power plants are gradually decommissioned and no new ones are constructed. This is the result of case studies and scenario analyses conducted by the German Institute for Economic Research (DIW Berlin), according to which the European emissions reduction targets can be achieved through a significant expansion of renewable energies—and entirely without the use of nuclear power.

“Europe does not need nuclear power,” says Claudia Kemfert, Head of the Department of Energy, Transportation, and Environment at DIW Berlin. “Significantly rising investment costs for new nuclear power plants, increasing operating costs, and unresolved issues regarding decommissioning and final disposal make the technology economically so unattractive that there is not, and will never be, a renaissance of nuclear power.” Above all, says Kemfert, the increasingly favorable electricity production from wind power and photovoltaics could offset the decline in nuclear power.

12 November 2015

Integrating the refugees will have a positive effect on the economy in the long run

DIW economists simulate various scenarios based on different assumptions – in every projected scenario, investment pays off in the longer term – successful integration will increase per capita income of Germany’s current population

The recent influx of refugees has created enormous challenges for politicians and society at large - but according to a simulation conducted by economists at the German Institute for Economic Research (DIW Berlin), a successful refugee integration is a win for everyone.

29 October 2015

Sanctions against Russia having little economic impact in the short term

Russian economy suffering due to weaker local currency – depreciation of the ruble primarily due to the drop in oil prices, not to sanctions

Since 2014, the ruble has fallen by more than 50 percent against the U.S. dollar—and this devaluation is putting the Russian economy under pressure. A study conducted by the German Institute for Economic Research (DIW Berlin) has concluded that the decline in the oil price has primarily been responsible for this devaluation, while the economic sanctions imposed by the Western countries after the annexation of Crimea are playing only a subordinate role.

22 October 2015

Municipal infrastructure in Germany requires significant strengthening

Persistent lack of investment among municipalities – social expenditures diminishing financial leeway – structurally weak regions threatening to fall further behind – DIW experts recommend temporarily making use of solidarity contributions to relieve municipalities of social expenditures

Investment in public infrastructure is critical for ensuring competitiveness and creating growth potential in Germany; nevertheless, the country’s municipal infrastructure, in particular, has been deteriorating for years. A group of experts at the German Institute for Economic Research (DIW Berlin) have thus examined Germany’s municipal investment activities.

“In spite of the government surpluses, a large proportion of the municipalities are investing too little, and the problems they are facing will be exacerbated if the economic policy does not swiftly and definitively counteract these issues. Above all, municipalities with high social spending are investing significantly less,” explains DIW Berlin President Marcel Fratzscher. DIW Berlin’s experts therefore recommend temporarily using the solidarity surcharge to relieve municipalities of providing the social benefits for housing and heating costs. This would create the framework for more municipal investment.

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