DIW Roundup http://www.diw.de/de/diw_01.c.433615.de/presse/diw_roundup/diw_roundup.html/ DIW Roundup de-de http://diw.de/sixcms/media.php/37/thumbnails/diw_roundup225.jpg.480210.jpeg DIW Berlin http://diw.de/ Linking Cap-and-Trade Systems http://www.diw.de/sixcms/detail.php?id=diw_01.c.593319.de Linking cap-and-trade systems promises gains in cost effectiveness and signals a strong commitment to carbon policy. Linking is also seen as one possible way of converging from regional climate policy initiatives toward a global climate policy architecture. Two linked systems have been established recently, one in Europe and one in North America. However, linking also comes with challenges, such as increased exposure to shocks originating in other parts of the linked system and a greater need for policy coordination. We first consider the benefits and challenges of linking conceptually. We then present some of the main features of the European and North American linked systems and outline the process that led to their establishment. Finally, we consider preliminary evidence on the workings of each linked system.


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Tue, 03 Jul 2018 12:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.593319.de
Regulatory differences and international financial integration http://www.diw.de/sixcms/detail.php?id=diw_01.c.584507.de The Capital Markets Union (CMU) – an initiative of the European Commission – aims to unify and deepen capital markets across EU Member States by removing existing barriers to cross-border investment and, in particular, harmonizing financial and business regulations. However, harmonizing institutional frameworks across the EU Member States that historically have different legal traditions is difficult and requires time. This article summarizes important steps to harmonizing business and financial laws in the EU and discusses empirical and theoretical literature on the role of legal harmonization in deepening and better integrating financial markets.


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Fri, 18 May 2018 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.584507.de
The macroeconomic effects of exchange rate movements http://www.diw.de/sixcms/detail.php?id=diw_01.c.578409.de The macroeconomic effects of exchange rate movements have been subject to an extensive debate in international economics. Traditionally, much of the discussion was focused on the relation between the effective exchange rate and the trade balance. However, the process of financial globalization has led to a sharp increase in foreign asset and liability positions across countries and also to a greater dispersion in foreign currency positions, with many countries being either large net creditors or net debtors in foreign currency. This has shifted the focus of the discussion from the trade balance to the external balance sheets of countries. This Roundup provides a brief overview of the literature on the macroeconomic impact of exchange rate movements.


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Tue, 20 Feb 2018 02:03:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.578409.de
What determines the Costs of Fiscal Consolidations? http://www.diw.de/sixcms/detail.php?id=diw_01.c.578375.de Recent studies have proposed several factors that determine how fiscal consolidations affect the economy. This Roundup focuses on several of these determinants. Namely, it discusses how the composition of the consolidation measure, the state of the business cycle, the level of private indebtedness and the amount of fiscal stress during which the measure is implemented influences the consequences of austerity. It seems reasonable to consider these factors more carefully when deciding about the type and timing of fiscal consolidation plans.


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Mon, 19 Feb 2018 12:05:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.578375.de
Monetary Policy Normalization in the Euro Area http://www.diw.de/sixcms/detail.php?id=diw_01.c.575961.de The ECB announced in October 2018 that it would begin to cut back the amount of monthly asset purchases starting January 2018 while extending the duration of the purchases until at least September 2018. At it latest Governor’s Council meeting in January 2019 it decided to remain on this track despite a sharp appreciation of the euro in the meanwhile. These steps were just two on a longer and potentially slippery path back towards standard monetary policy. Market turbulences like the so-called “Taper Tantrum”, which followed the Fed’s 2013 announcement that it was considering to cut back its asset purchasing program, have made central banks wary of the risks of premature or overly explicit announcements of monetary policy normalization. This article provides a short review of quantitative easing (QE) in the euro area since 2015 and of the debate about the right timing for terminating QE.


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Tue, 30 Jan 2018 11:01:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.575961.de
Wie beeinflussen Wehrdienstregelungen die Arbeitsmarkt- und Bildungsentscheidungen der Betroffenen? Ökonomische Evidenz zu einem nach wie vor wichtigen Thema http://www.diw.de/sixcms/detail.php?id=diw_01.c.572582.de Weltweit wird die Wehrpflicht in etwa 60 Ländern praktiziert (CIA’s World Factbook 2017). Die Dauer des Wehrdienstes, definiert als die Ausübung eines gesetzlich verpflichtenden Dienstes in den Streitkräften eines Staates, variiert je nach Land.  und beträgt in den meisten europäischen Ländern weniger als ein Jahr. In Ländern mit angespannter Sicherheitslage kann der Wehrdienst jedoch deutlich länger dauern, wie  z.B. in Südkorea (26-30 Monat) oder Israel (36 Monate).

In Deutschland betrug die Dauer des Wehrdienstes zwischen 6 und 18 Monaten. Allerdings wurde die Wehrpflicht in Deutschland vor sechs Jahren ausgesetzt. Dennoch wird immer wieder über eine Wiedereinführung der zum 11. Juli 2011 nach 55 Jahren ausgesetzten Wehrpflicht öffentlich debattiert. Dies geschieht im Kontext der Sicherung der deutschen Außengrenzen, einer veränderten sicherheitspolitischen Lage an der Ostflanke der NATO, anhaltender Personalprobleme sowie einer Zunahme rechtsextremistischer Vorfälle in der Bundeswehr. Auch im europäischen Ausland ist die Wehrpflicht  ein Thema. So wurde z.B. in Schweden durch eine rot-grüne Regierung beschlossen die Wehrpflicht 2018 wiedereinzuführen.

Was würde dies für junge Männer oder auch Frauen bedeuten? Wie beeinflussen Wehrdienstregelungen die Arbeitsmarkt- und Bildungsentscheidungen junger Menschen? Dies sind Fragen, die auf der Basis der ökonomischen Literatur evidenzbasiert in diesem Beitrag zusammengetragen werden. 


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Tue, 12 Dec 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.572582.de
Internationale Investitionen und Leistungsbilanzungleichgewichte: Die Bedeutung von Wertschwankungen http://www.diw.de/sixcms/detail.php?id=diw_01.c.572376.de Die weltweiten Kapitalflüsse sind seit den 1980er Jahren bis zum Ausbruch der Finanzkrise stark gestiegen. Im Zuge dessen sind etwa die Auslandsinvestitionen Deutschlands auf rund 250 Prozent in Relation zum Bruttoinlandsprodukt, die Investitionen des Auslands in Deutschland auf etwa 200 Prozent gestiegen. Diese positive Differenz ist eine Folge der kontinuierlichen Leistungsbilanzüberschüsse Deutschlands, welche die Nettofinanzflüsse abbilden – also die Differenz zwischen Ab- und Zuflüssen. Kapitalanlagen im Ausland bieten Investoren die Chance, Ersparnisse zu diversifizieren und möglicherweise höhere Renditen zu erwirtschaften als im Inland. Im Gegenzug ergeben sich aus Auslandsinvestitionen aber auch Risiken; so können im Zuge von Preis- und Wechselkursschwankungen hohe Verluste auftreten. Potentielle Wertschwankungen auf das Auslandsvermögen sind für Deutschland relevant. In der wirtschaftspolitischen Diskussion wird kontrovers diskutiert, ob zusätzliche Investitionen in die inländische Infrastruktur oder in die Forschung und Entwicklung gesamtwirtschaftlich höhere und weniger volatile Renditen erzielen könnten als ein Teil der Auslandsinvestitionen.


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Thu, 07 Dec 2017 08:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.572376.de
Capital market integration and macroeconomic stability http://www.diw.de/sixcms/detail.php?id=diw_01.c.569121.de After the establishment of the Banking Union, the European Commission is working on measures to foster capital market deepening in Europe. Key goals for a European Capital Markets Union are to provide firms with alternative funding sources to bank credit and to make economies more resilient to local shocks through better international risk sharing. While open capital markets can improve portfolio diversification, growth and welfare, the recent financial crisis was a reminder that capital market integration also carries risks in terms of economic stability. This article summarizes pros and cons of capital market openness and discusses stability implications of different forms of capital market integration.


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Thu, 16 Nov 2017 02:28:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.569121.de
The use of financial market variables in forecasting http://www.diw.de/sixcms/detail.php?id=diw_01.c.569173.de Financial market indicators can provide valuable information for forecasting macroeconomic developments. In response to the global financial crisis of 2007/2008, the role of financial variables for forecasting has been revisited, and new empirical and theoretical forecasting methods able to explicitly incorporate financial market information have been developed. This roundup discusses characteristics of financial variable movements and the relation to business cycles. It furthermore summarizes some of the new theoretical and empirical approaches at hand for forecasting macroeconomic variables with financial market information, and highlights main challenges forecasters willing to consider financial market information in forecasting exercises have to face.


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Wed, 15 Nov 2017 10:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.569173.de
Microenterprises in Developing Countries: Is there Growth Potential? http://www.diw.de/sixcms/detail.php?id=diw_01.c.566624.de Microenterprises account for a large fraction of employment in developing countries and they are likely to increase in importance in the future. In Sub-Saharan Africa, for example, around 8 million additional jobs need to be created annually in order to cope with the increasing number of new entrants into the labour market (The World Bank, 2013). As microenterprises typically only provide subsistence income to few individuals the question remains whether they have the potential to grow and to contribute to the creation of jobs.

Studies suggest that many businesses do indeed have the potential to grow. However, they often lack the necessary funds due to imperfect credit markets, insufficient household savings or behavioral reasons and missing information to exploit their potential. Policy interventions to overcome these issues show some promising results. 


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Fri, 13 Oct 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.566624.de
Does more education protect against mental health problems? http://www.diw.de/sixcms/detail.php?id=diw_01.c.565260.de Mental health conditions are a leading cause of disability-adjusted life years (DALYs) and health costs worldwide: They account for 199 million DALYs or 37 percent of healthy life years lost from non-communicable diseases. The sum of direct and indirect costs worldwide were estimated to amount to 2.5 trillion US dollars in 2010 and projected to increase to 6 trillion US dollars in 2030 (Bloom et al., 2010).
The heavy financial and societal burdens of mental health impairments also mean that prevention measures to alleviate these problems will have high financial and societal returns. Education has been theorized to be such a prevention measure. This DIW Roundup reviews contemporaneous research on the causal effect of education on mental health.


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Thu, 28 Sep 2017 10:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.565260.de
Effizienzanalysen frühkindlicher Bildungs- und Betreuungsangebote: Mehr differenzierte Analysen für Deutschland erforderlich http://www.diw.de/sixcms/detail.php?id=diw_01.c.562778.de Vor dem Hintergrund knapper öffentlicher Ressourcen bilden Effizienzanalysen ein zentrales Instrument im Prozess der politischen Entscheidungsfindung. Durch die Gegenüberstellung von Kosten und Nutzen können sie die Frage beantworten, ob und in welche frühkindlichen Bildungs- und Betreuungsangebote investiert werden sollte. Dieser Roundup zeigt methodische Herausforderungen auf und gibt einen Überblick über bestehende Effizienzanalysen im Bereich frühkindlicher Bildungs- und Betreuungsangebote in den USA und Deutschland. 


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Mon, 31 Jul 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.562778.de
Wind power: mitigated and imposed external costs and other indirect economic effects http://www.diw.de/sixcms/detail.php?id=diw_01.c.556794.de Since the 1990s, (onshore) wind power has become an important technology for electricity generation throughout the world. The economic rationale is the mitigation of negative externalities of conventional technologies, in particular emissions from fossil fuel combustion. However, wind power itself is not free of externalities. Wind turbines are alleged visual and noise impacts as well as threats to wildlife. Further indirect economic effects comprise costs for integrating variable wind electricity into the power system. Economic outcomes, such as employment and GDP, can be positively or negatively affected both locally and nationally. This Roundup summarizes evidence from multiple literatures on mitigated and imposed external costs and further indirect economic effects.


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Thu, 27 Apr 2017 11:31:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.556794.de
The Natural Rate of Interest and Secular Stagnation http://www.diw.de/sixcms/detail.php?id=diw_01.c.551175.de In many advanced economies, there has been a declining trend in interest rates over the past thirty years. Since the financial crisis, interest rates have remained particularly low. Though a decrease in inflation explains part of the fall in nominal interest rates, there is also a clear downtrend in real interest rates. Against this backdrop, a debate has emerged over the factors that might have contributed to this decline. Potential persistent factors discussed under the heading of “secular stagnation” include a decline in profitable investment opportunities and high global savings rates. It is often argued that, due to these factors, the so-called natural interest rate, which is the level of interest rate consistent with stable, non-inflationary growth, has decreased. However, there are also arguments that the low interest rates are transitory and are due to factors such as post-crisis private debt deleveraging, a temporary “savings glut”, or higher regulatory burdens for firms and households. This report summarizes the discussion on the underlying causes of the low interest rate environment and the potential for a period of secular stagnation.


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Mon, 30 Jan 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.551175.de
The Natural Rate of Interest II: Empirical Overview http://www.diw.de/sixcms/detail.php?id=diw_01.c.551089.de The concept of the natural rate of interest (NRI) dates back to Wicksell (1898) and has since then been highly debated in the economic literature. In practice, estimates of the NRI can be employed as a versatile tool for macroeconomic analysis and are a core element within the popular neo-Wicksellian (or New-Keynesian) framework. The real rate gap, i.e. the difference between the actual interest rate and the NRI, provides valuable information about the state of the economy and can help policy makers to adjust the monetary policy stance. However, the NRI cannot be directly observed and has to be calculated from other economic data. While the empirical literature provides various estimation approaches, all of them are subject to serious measurement problems and yield fairly uncertain estimates. This Roundup reviews the advantages and shortcomings of the most popular measurement methods and presents an estimation of the NRI and the real rate gap based on the Laubach and Williams (2003) model. 


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Mon, 30 Jan 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.551089.de
The Natural Rate of Interest I: Theory http://www.diw.de/sixcms/detail.php?id=diw_01.c.551037.de The term natural (or neutral) real interest rate refers to the equilibrium value of the real interest rate. As this equilibrium is usually conceived as a situation where inflationary or deflationary pressures have abated, the natural real interest rate is a key concept for central banks seeking to stabilize the general price level or targeting the rate of inflation. The present roundup provides a brief historical review of this concept and explains the relevance of the natural real rate for monetary policy analysis. 


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Fri, 27 Jan 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.551037.de
The Inflation Targeting Debate http://www.diw.de/sixcms/detail.php?id=diw_01.c.549678.de Inflation targeting has become one of the most prominent monetary regimes around the globe. Proponents argue that it reduces the dynamic inconsistency problem of monetary policy and thereby stabilises prices, which in turn promotes growth. Opponents, on the other hand, say that by focusing on price stability inflation targeting neglects other important policy objectives, such as financial stability, and thereby contributed to the built up of the global financial crisis. This roundup summarises the arguments made in the debate. It concludes that no consensus has emerged in the empirical literature about whether inflation targeting improves macroeconomic performance.


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Mon, 09 Jan 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.549678.de
Arbeitszeitwünsche von Beschäftigten: eine Black Box? http://www.diw.de/sixcms/detail.php?id=diw_01.c.549541.de Wie viel Zeit Menschen in ihre Erwerbsarbeit investieren wollen, können und müssen ist nicht nur für den Einzelnen, sondern auch für eine Ökonomie als Ganzes von zentraler Bedeutung. Doch je nach Studie und zugrundeliegendem Datensatz ergibt sich ein heterogenes Bild über Arbeitszeitwünsche und -realitäten in Deutschland. Diesem Phänomen und seinen Ursachen geht der nachfolgende Bericht nach.


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Tue, 03 Jan 2017 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.549541.de
Wie beeinflusst der Besuch einer Kindertageseinrichtung nicht-kognitive Fähigkeiten? http://www.diw.de/sixcms/detail.php?id=diw_01.c.549285.de Kindertageseinrichtungen sollen als Ort der frühkindlichen Bildung die Entwicklung und Fähigkeiten von Kindern fördern. Die frühe Bildung ist besonders wichtig, da sich viele Fähigkeiten früh im Lebensverlauf herausbilden. Außerdem erleichtern früh erworbene Fähigkeiten den weiteren Erwerb von Fähigkeiten und beeinflussen somit die gesamte Bildungsbiografie. Die ökonomische Forschung unterscheidet zwischen kognitiven und nicht-kognitiven Fähigkeiten. Kindertageseinrichtungen können beide Aspekte der kindlichen Entwicklung fördern. Dieser Roundup fasst die ökonomische Evidenz zu den Effekten frühkindlicher Bildung und Betreuung in Kindertageseinrichtungen auf nicht-kognitive Fähigkeiten zusammen.


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Tue, 20 Dec 2016 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.549285.de
Tax evasion and the impact of international regulation: a summary of empirical results http://www.diw.de/sixcms/detail.php?id=diw_01.c.547771.de While combating tax evasion ranks highly on the international policy agenda and journalists are covering leak after leak, the economics profession at large has somewhat neglected the subject until recently. In the last years, however, a combination of better international financial data and ingenious identification strategies in several pioneering studies has made the subject popular in empirical economics. These contributions are summarized below.             


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Tue, 29 Nov 2016 11:00:00 +0200 http://www.diw.de/sixcms/detail.php?id=diw_01.c.547771.de