DIW Weekly Report

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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; ...

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Sanctions against Russian Oligarchs also Affect Their Companies

In February 2022, the EU Commission announced economic sanctions against Russian oligarchs. The goal was to exert pressure on the Kremlin: initially to stop deploying troops to the Donetsk and Luhansk regions and ultimately to end its attack on Ukraine. The present report investigates how these sanctions affect companies headed by Russian oligarchs. The empirical findings show that after sanctions ...

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Companies Contribute Significantly to the Integration of Refugees in Germany

Following the 2015 refugee influx, recent studies have found that around one in four companies have hired refugees. A survey of 100 companies that hired refugees shows that hiring refugees can increase employee satisfaction, improve reputations, and positively affect corporate developments. At the same time, hiring refugees also poses challenges for employers. These include barriers in the hiring process, ...

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Refugees in Germany Perceived Higher Discrimination in the Wake of the Coronavirus Pandemic

Refugees in Germany perceive discrimination due to their country of origin in various life dimensions, which can negatively affect their integration into society. Using IAB-BAMF-SOEP survey data, this report analyzes to what extent refugees perceive discrimination on the labor market, at educational institutions, on the housing market, with public authorities, and in daily life. The results show that ...

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ECB Can Lower Fuel and Heating Costs by Increasing Interest Rates but Would Risk Economic Recovery

Inflation has been growing considerably since the middle of 2021, with rising energy prices driving the increase in particular. Since the end of February 2022, the trend has also been exacerbated by the ongoing Russian invasion of Ukraine. To keep prices stable, the European Central Bank must rein in its accommodative monetary policy. However, would doing so—by enacting an interest rate increase, for ...

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Low Emission Zones Improve Air Quality and Health but Temporarily Decrease Life Satisfaction

Air pollution results in high economic costs arising from its negative impacts on human health, especially in urban areas. Driving restriction policies such as low emission zones (LEZs) are designed to improve air quality. Indeed, empirical analyses in this Weekly Report confirm that LEZs reduce traffic-related air pollution. However, the analyses also reveal unintended adverse effects on secondary ...

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Rent Control Reduces Economic Inequality at a Price

Over the course of the 20th century, governments have frequently used rent control to keep rents affordable, especially in times of crisis when housing is scarce. Existing research shows that rent control has undesirable side effects, such as overall societal welfare losses, market misallocation, a declining housing supply, and lower mobility. However, there has been little research examining the effect ...

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Tax Revenue: Swifter Recovery during the Coronavirus Pandemic than during the Global Financial Crisis

Although economic growth continued to be lukewarm in 2021, tax revenue increased significantly, even exceeding the pre-crisis level despite economic policy measures associated with revenue losses. During the 2008-2011 global financial crisis, tax revenue followed a different path: Its recovery lagged behind economic recovery, first reaching the pre-crisis level in 2011. In 2021, value-added tax (VAT) ...

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Justice Profiles in Europe: Major Differences in Evaluation of Inequality

European societies have been experiencing growing income and wealth inequalities over the past few decades, and, accordingly, they are a topic of intense discussion. Although the population’s evaluation of inequalities as just or unjust is important for designing social policies, there has been little research on this evaluation. To close this gap, we use justice evaluations of income and wealth in ...

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DIW Berlin Economic Outlook: Summer Upswing to Follow Winter Slump

The Omicron wave of the coronavirus has impacted economies worldwide, resulting in a bleak winter. Although restrictions on economic and public life have been less severe than at the beginning of 2021 in many places—mainly due to the progress of vaccination campaigns—and there are prospects of easing restrictions in Germany as well, the labor shortage caused by the current rates of infection is noticeable. ...