DIW Weekly Report

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Activation of New ECB Emergency Program TPI Has Not Yet Been Required

Since the beginning of 2022, monetary policy in the euro area has been gradually normalizing. As a result, bond yields of highly indebted countries such as Italy and Greece are rising more sharply than those of countries with less debt, such as Germany, a development referred to as bond market fragmentation. To ensure the coherent effectiveness of monetary policy on economic developments and, ultimately, ...

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Nearly 1.1 Million People in Germany Use Food Banks, Single and Separated Parents in Particular at an Above-Average Frequency

Food banks are returning to the spotlight as their use increases due to the coronavirus pandemic and the influx of Ukrainian refugees to Germany. The current discussion is focused on whether the food banks can handle the increasing number of users as well as the financial and organizational challenges that come with them. Until now, however, no robust, empirical data on food bank use has been available. ...

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Carbon Contracts for Difference as an Instrument for Strengthening Climate Cooperation between Industrialized and Emerging Economies

Industrialized countries and emerging economies must cooperate in order to decarbonize the emissions-intensive industrial sector and to limit global warming to 1.5 degrees Celsius. While Germany and the other G7 countries have committed to supporting emerging economies in their efforts to combat climate change via international climate finance, it remains to be seen how this support can be implemented ...

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Consumer Debt: Many Borrowers Unaware of Their Interest Rates; Cost Display Influences Likelihood of Accepting Credit Scenario

The consumer debt of households in Germany totals in the triple-digit billions and is characterized by a wide range of interest rates. Despite the high volume of debt, many people do not know the terms of their consumer credit contracts. This report analyzes new survey data on general knowledge about typical forms of consumer credit, such as the overdraft facility and consumer loans. Women tend to ...

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Contracts for Difference Support the Expansion of Renewable Energy Sources while Reducing Electricity Price Risks

The German Federal Government passed the “Easter Package” in July 2022, which envisages a number of measures for the expansion of renewable energy sources. The package retains sliding market premiums as a remuneration mechanism, which protect electricity producers unilaterally, while contracts for difference (CfDs), which also protect electricity customers, are only used in the offshore wind sector. ...

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Changes in Working Hours Are Driving Earnings Inequality

According to Socio-Economic Panel (SOEP) data, inequality in gross monthly earnings in Germany increased significantly between 1993 and 2003 and has been stagnating at a high level since 2008. As this Weekly Report shows, the increase is not being driven by higher hourly wage inequality, but rather by working hours: In recent years, employees with a high hourly wage work more than previously compared ...

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From Hartz IV to Bürgergeld: Reform Preferences of the Long-Term Unemployed

The German government is planning to reform Hartz IV by replacing it with a simpler and more accessible system known as Bürgergeld. Using a random-based survey of eight job centers in North Rhine-Westphalia, this Weekly Report considers the perspectives of the long-term unemployed: What do they think about the reforms? How do they perceive their situation? What are their daily lives like? The findings ...

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Ampel-Monitor Energiewende Shows the Pace of the Energy Transition Must Be Accelerated Significantly

The so-called traffic light coalition is facing a challenge: it has set ambitious energy policy targets, but can only achieve them if the pace of the energy transition is increased significantly. To contribute to the current energy policy debate, the Ampel-Monitor Energiewende (Monitor of the Traffic Light Coalition’s Energy Transition Targets) was developed at DIW Berlin. Based on open data, the Ampel-Monitor ...

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Brüning’s Austerity Policies of the Early 1930s Intensified the Economic Slump and Increased Unemployment

May 2022 marked the 90th anniversary of the end of Heinrich Brüning’s term as Reich Chancellor. To this day, the economic effects of Brüning’s extreme austerity measures remain unclear. However, new data and calculations have made an initial quantification of the economic consequences of Brüning’s policies possible. An analysis based on a time series model illustrates how the Weimar Republic’s economy ...

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Expanding Solar Energy Capacity to Power the Transition to Heat Pumps

Increasing the use of heat pumps is an important measure for reducing carbon emissions in the heating sector as well as natural gas imports. This report uses an electricity sector model to investigate the effects of an accelerated expansion of the heat pump stock on the German electricity sector in 2030. Adding around six million heat pumps would increase electricity demand by nine percent in 2030; ...