DIW Roundup 88 / 2015
Despite expansionary central bank action, inflation remains low in the euro area. How much can we expect from the additional stimulus in face of anaemic global growth and declining oil prices? More generally, have central banks lost the ability to steer inflation in a globalised world where external factors have powerful effects on domestic inflation? This roundup summarises the evidence in the literature ...
2015| Malte Rieth
DIW Roundup 87 / 2015
Climate policy consistent with the 2°C target needs to install mechanisms that leave most current coal reserves unburned. Demand-side policies have been argued to be prone to adverse carbon leakage and “green paradox” effects. A growing strain of literature argues in favor of supply-side policies in order to curb future coal consumption. Various concepts with analogies in other sectors are currently ...
2015| Kim Collins, Roman Mendelevitch
DIW Roundup 86 / 2015
Shortly before the upcoming UN climate summit, Angela Merkel wrote in a German newspaper: “With good reason, it is expected from governments and politicians, that they do not longer close their eyes to the pressing scientific results that climate protection requires rapid and vigorous action.” She further calls for a clear negotiation outcome: “The greenhouse gas emissions do not only have to be stabilized, ...
2015| Philipp M. Richter, Hanna Brauers
DIW Roundup 83 / 2015
In many advanced economies, the economic recovery from the financial crisis has been sluggish. In light of these developments, it has been argued by various economists that economic growth per capita has already been on a downward trend since the 1980s. Studies suggest that this is largely due to low productivity growth. While factors of production such as labor and capital are being used more productively ...
2015| Guido Baldi, Patrick Harms
DIW Roundup 79 / 2015
The time fathers spend and the activities they perform with children have risen continuously in most Western countries. Increasing father involvement in child care has also been an explicit policy objective with many European countries implementing individual parental leave entitlements for fathers. Whereas these policies mainly aimed at facilitating reconciliation of market work and family care and ...
2015| Pia S. Schober
DIW Roundup 78 / 2015
The latest long-term projection of Germany’s population implies a clear trend: even though slight growth is expected over the next decade, a decline in the future is almost inevitable. Furthermore, an ageing society combined with a low fertility rate will lead to massive shrinkage of the working-age population. What are the social and economic consequences of these developments? Is a decline in economic ...
2015| Dirk Ulbricht, Dmitry Chervyakov
DIW Roundup 76 / 2015
According to the current report on the Millennium Development Goals, the share of undernourished people living in the developing world has fallen from 23.3% in 1990-1992 to 12.9% in 2014-2016 (projection). Despite this progress towards global food security, about 795 million people worldwide (or 780 million people in developing regions) will remain undernourished in 2014-2016. Put differently, more ...
2015| Isabel Teichmann
DIW Roundup 75 / 2015
Before the 2007 crisis, the trade-off between output and inflation played a leading role in the discussion of monetary policy. Instead, issues relating to financial stability played a less pronounced role in shaping the stance of monetary policy andwere limited to asset price dynamics. This Round-Up argues that the great interest that emerged after the 2007 crisis in the effects of monetary policy ...
2015| Michele Piffer
DIW Roundup 72 / 2015
The EU’s Emissions Trading System (EU ETS) is a regional cap-and-trade program in a world with no binding international climate agreement. This climate regulation may induce a relocation of production away from Europe, with potentially negative consequences for the European economy. This relocation could lead to carbon leakage, i.e. a shift of greenhouse gas emissions from Europe into regions with ...
2015| Aleksandar Zaklan, Bente Bauer
DIW Roundup 71 / 2015
Various proposals are currently being suggested to encourage higher foreign direct investment in countries within the euro area, particularly between individual member states. The intended goal is to assist in stimulating economic growth in the euro area. Against this background, this article provides an overview of the large and heterogeneous academic literature on the influence of direct investment ...
2015| Guido Baldi, Jakob Miethe
DIW Roundup 68 / 2015
Individuals do not exist in isolation but are embedded within networks of relationships, such as families, coworkers, neighbors, friendships or socioeconomic groups. While there is a long tradition in sociology and anthropology focusing on theimportance of social structure, norms and culture, economists have long ignored social influences on individual behavior. Even though social influences may play ...
2015| Clara Welteke
DIW Roundup 67 / 2015
The economic literature provides vast evidence of how public provision of day care for children below school age increases the labour force participation of mothers. The causal effect of all-day schooling in primary school on maternal supply has been examined less since morning-only schooling is less common in developed countries. The present article summarises the findings of (mostly) economic studies ...
2015| Jan Marcus, Frauke H. Peter
DIW Roundup 66 / 2015
Small and medium-size enterprises (SMEs) are highly dependent on bank financing, which is why they have been particularly hit by tighter credit conditions in the aftermath of the global financial crisis. Given that SMEs account for about 60% of value added and 70% of employment in the euro area, they are crucial for economic recovery. Consequently, several policy initiatives have been launched to alleviate ...
2015| Franziska M. Bremus
DIW Roundup 65 / 2015
Individual health is not only determined by genetic factors, but also by negative or positive events during the life course. For example, children exposed to natural disasters or violent conflicts are more likely to have poor health as adults. Positiveexternal factors, such as nutritional programs, will, instead, improve individual health in the long-term. In turn, health can directly affect education ...
2015| Valeria Groppo
DIW Roundup 61 / 2015
Not just since the European Central Bank announced the large-scale purchase of government bonds a few weeks ago, large-scale asset purchases have always been a controversially discussed topic. This DIW Roundup summarizes the measures that have been taken by central banks in Japan, USA and UK and the empirical evidence about the impacts of these measures on financial markets and the real economy.
2015| Kerstin Bernoth, Philipp König, Carolin Raab
DIW Roundup 60 / 2015
In the face of interest rates having hit their zero lower bound in major economies, large-scale asset purchases have become an important weapon of central banks in recent years. It is, however, not clear whether and under which circumstances such policy measures produce the desired effects. This round-up provides a selective overview of theoretical research that has been devoted to understand under ...
2015| Carolin Raab, Philipp König, Kerstin Bernoth
DIW Roundup 59 / 2015
The European Union Emission Trading Scheme (EU ETS) has been implemented to provide a common climate policy instrument across European Union countries, to contribute to a credible investment perspective for low-carbon investors and support further European integration of energy markets. Thus the EU ETS is a key element of the European Energy Union.However, given the accumulation of a large surplus ...
2015| William Acworth, Nils May, Karsten Neuhoff
DIW Roundup 58 / 2015
The recent decision by the Organization of the Petroleum Exporting Countries (OPEC) not to decrease their output quota in spite of a drastic decline of crude oil prices has brought renewed attention to this supplier group dominating the crude oil market. However, the empirical evidence that OPEC truly acts as a textbook cartel is rather limited. This Roundup summarizes the theories proposed over the ...
2015| Daniel Huppmann, Franziska Holz
DIW Roundup 55 / 2015
The question of whether monetary policy should target asset prices remains a contentious issue. Prior to the 2007/08 financial crisis, central banks opted for a wait-and-see approach, remaining passive during the build-up of asset price bubbles but actively seeking to stabilize prices and output after they burst. The macroeconomic and financial turbulence that followed the subprime housing bubble has ...
2015| Philipp König, David Pothier
DIW Roundup 53 / 2015
After a period of stagnation that lasted for almost two decades, German house prices began to grow at an accelerated pace since late 2010. Real house prices that even had been declining in 2000-2008 started to climb up steeply from the second half of 2010, followed by a recovery of construction activities. This development raised concerns about the formation of a speculative house price bubble among ...
2015| Konstantin A. Kholodilin, Claus Michelsen, Dirk Ulbricht