DIW Weekly Report

Inflation in the Euro Area: Factors Mostly Have Only a Temporary Effect, but Risk of Prolonged Elevated Inflation Remains

Headline inflation in the euro area jumped to more than three percent in the summer after years of relatively low inflation rates well below the target of close to but below two percent set by the ECB until July 2021. One of the main reasons for the rise in inflation is the increase in energy prices since the beginning of 2021. However, there are further indications that inflation in the euro area ...

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20 Years of the Riester Pension - Personal Retirement Provision Requires Reform

Introduced 20 years ago as a part of the 2001 pension reform, the Riester pension is meant to function as an essential component of the German pension system with the aim of compensating for decreasing public pensions. However, data collected by the SOEP show that this objective has not yet been achieved. For ten years, use of the Riester pension plan has been stagnating at around 25 percent of the ...

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Only Strict Coronavirus Regulations for Vacationers Affect Passenger Air Traffic between Germany and Mallorca

Mallorca is the most popular foreign travel destination for German tourists, with almost five million flying to the Balearic island every year. However, the coronavirus pandemic brought passenger air traffic to a virtual standstill in March 2020. Flights to Mallorca resumed in June 2020, but the seat offerings were only between ten and 86 percent of the 2019 level depending on the week. This Weekly ...

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Financial Education Measures Are Effective: Germany Should Develop a National Strategy for Financial Education

The OECD recommends its member countries implement national strategies for financial education. Many other countries, such as China and India, also have such strategies, whereas Germany does not. The strongest reason for rejecting such a strategy is the supposition that financial education interventions are ineffective. Using all available randomized experimental studies, this study investigates and ...

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German Economy Only Slowly Emerging from the Pandemic: DIW Economic Outlook Autumn 2021

The German economy is taking longer than expected to overcome the pandemic: It is likely to increase by only 2.1 percent in 2021 and capacities remain markedly underutilized. In addition, global supply bottlenecks are affecting German industry, resulting in stalled domestic production despite high demand. Following a profitable summer due to low case numbers and progress in the vaccination campaign, ...

Global Economy Returning to Its Recovery Course after Summer Setbacks: DIW Economic Outlook Autumn 2021

Recently, the coronavirus pandemic has caused economic developments in major economies to drift apart: While infection rates were declining and production was experiencing strong growth in places such as Europe and the United States in the second quarter of 2021, emerging economies were experiencing strict economic restrictions due to high case numbers. In some of these countries, the economy declined. ...

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Labor-Intensive Firms Are a Catalyst for Monetary Policy and Its Distributive Effects

The mandate of the European Central Bank’s monetary policy is to ensure price stability. Interest rate changes by the ECB affect labor costs and the value added of firms. If both dimensions are not equally affected, monetary policy has a distributive effect between workers and shareholders. Balance sheet data from over two million companies in the euro area show that the labor costs in labor-intensive ...

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Childcare Workers Experience Many Stressors and Little Recognition

Childcare workers are essential for both families and society at large, and their working conditions and pay are often a topic of discussion. Using new data spanning until the end of 2019 from the Socio-Economic Panel (SOEP) as well as a special SOEP additional survey in day care centers, this report shows how childcare workers view their occupation, day-to-day work, and pay. According to the data, ...

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Hospital Mergers Can Impact the Offer of Health Care Services

In the last decades, many European hospital markets witnessed a wave of mergers leading to increased levels of market concentration. The effects of hospital mergers and the effectiveness of competition enforcement have been discussed by politicians but understudied by academics. This report studies how hospital mergers impact hospital service provision by focusing on the French hospital industry from ...

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Collective Action: New Guiding Principles for International Climate Finance

To limit global warming to 1.5 degrees Celsius, it is necessary for industrialized countries to support developing countries financially. The channels and mechanisms under which this support would be provided are known as International Climate Finance. Building upon expert interviews with a focus on the industrial sector, this report analyses the different areas of International Climate Finance and ...

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Restrictive US Trade Policy Has a Significantly Negative Effect on Financial Markets

With its America First strategy, the former US administration turned away from an internationally oriented trade policy. It attempted to assert its interests, especially vis-à-vis China, with bilateral and mostly restrictive measures such as import tariffs. This Weekly Report shows that the costs of such a strategy are immense, at least in the medium-term analysis conducted: Almost all US industries ...