-
DIW Discussion Papers 2145 / 2025
Trade conflicts, geopolitical tensions, digital disruption, and the climate crisis pose major challenges for the European Union (EU) and its member states. As called for in the Draghi Report, industrial policy measures can increase competitiveness, strengthen resilience, and facilitate the twin transformation. This article explores ways in which competition policy can be realigned to better accommodate ...
2025| Tomaso Duso, Martin Peitz
-
DIW Discussion Papers 2144 / 2025
This paper studies the labor market impact of structural change by distinguishing between industry- and occupation-based measures of manufacturing and service employment. Using German data from 1975–2019, we find that 67% of manufacturing jobs lost in manufacturing industries are offset by new manufacturing jobs in service industries. Linking these aggregate patterns to worker-level outcomes, we show ...
2025| Dominik Boddin, Thilo Kroeger
-
DIW Discussion Papers 2143 / 2025
We study how rent control and housing rationing shape housing investment and market tightness in Geneva using a VAR on annual data (1994–2022) with generalized impulse responses and Granger causality. We find that housing rationing functions as a binding quantity restriction as it precedes a contraction in new institutional construction and Granger-causes lower vacancy rates. This increased scarcity ...
2025| Kristyna Ters, Konstantin A. Kholodilin
-
DIW Discussion Papers 2142 / 2025
Despite substantial research on job satisfaction in self-employment, we know little about the specific consequences for the venture when job satisfaction declines after an external shock. Taking the COVID-19 pandemic as an example of an external shock and drawing on a sample of nearly 7,000 self-employed individuals living in Germany, we investigate how declines in job satisfaction are related to investment ...
2025| Joern Block, Miriam Gnad, Alexander S. Kritikos, Caroline Stiel
-
DIW Discussion Papers 2141 / 2025
I study the transmission mechanism of Quantitative Easing (QE) in the form of large-scale asset purchases in the mortgage market to aggregate consumption. To this end, I develop a New Keynesian model that features heterogeneous households, a microfounded housing market, and frictional intermediation. This model helps explain the empirical evidence suggesting that QE increases aggregate consumption ...
2025| Hannah Magdalena Seidl
-
DIW Discussion Papers 2140 / 2025
We study the effects of movements in aggregate lending standards on macroeconomic aggregates and inequality. We show in a New Keynesian model with heterogeneous households and housing that a looser loan-to-value (LTV) ratio stimulates housing demand, nondurable consumption, and output. Our model implies that the LTV shock transmits to macroeconomic aggregates through higher household liquidity and ...
2025| Vanessa Schmidt, Hannah Magdalena Seidl
-
DIW Discussion Papers 2139 / 2025
Populist parties increasingly deploy narratives of social injustice to portray climate policy as elitist and unfair. This paper investigates how such narratives affect public attitudes toward populism and democratic institutions. We conduct a survey experiment with approximately 1,600 respondents in Germany, exposing participants to three common narratives about the distributional costs of climate ...
2025| Matilda Gettins, Lorenz Meister
-
DIW Discussion Papers 2138 / 2025
Stock market participation among working household heads jumped upwards in 2020 – in Germany by about 25%. A major cause is the required use of work from home (WfH). We show this by adding WfH to a large set of explanatory variables. Moreover, we implement an instrumental variables estimation based on industry-specific levels of WfH-capacity. The transmission channels seem to work via increased available ...
2025| Lorenz Meister, Lukas Menkhoff, Carsten Schröder
-
DIW Discussion Papers 2137 / 2025
This paper investigates the effectiveness of the European Central Bank’s (ECB) communication in shaping market expectations and real economic outcomes. Using a transformer-based large language model (LLM) fine-tuned to ECB communication, the tone of monetary policy statements from 2003 to 2025 is classified, constructing a novel ECB Communication Stance Indicator. This indicator contains forward-looking ...
2025| Kerstin Bernoth
-
DIW Discussion Papers 2136 / 2025
This paper shows that in an economy where distortions prevent firms from using their profit-maximizing amounts of capital and labor, removing these distortions can generate both an efficiency gain and a higher aggregate labor share. We use firm-level data on Chinese manufacturing, mining, and public utilities in 2005 and estimate a general equilibrium model with heterogeneous productivity, technology, ...
2025| Xiaoyue Zhang, Junjie Xia
-
DIW Discussion Papers 2135 / 2025
Commitment to gender equality and diversity has long been a stated priority for large companies, and one visible way to signal this commitment is through gender-inclusive language. Public debates around such language use increasingly surface regarding companies’ communication with stakeholders, including employees, customers, and shareholders. In particular, the adoption of newer forms of gender-inclusive ...
2025| Carolin Müller-Spitzer, Samira Ochs, Virginia Sondergeld, Katharina Wrohlich
-
DIW Discussion Papers 2134 / 2025
While Equity Crowdfunding (ECF) platforms are a virtual space for raising funds, geography remains relevant. To determine how location matters for entrepreneurs using equity crowdfunding (ECF), we analyze the spatial distribution of successful ECF campaigns and the spatial relationship between ECF campaigns and traditional investors, such as banks and venture capitalists (VCs). Using data from the ...
2025| Torben Klarl, Alexander S. Kritikos, Knarik Poghosyan
-
DIW Discussion Papers 2133 / 2025
Carbon pricing policies are usually combined with compensation for exposed firms to prevent adverse competitiveness effects. In cap-and-trade systems, this carbon cost compensation mostly occurs through free allocation of emission permits. Using an administrative panel of German manufacturing firms, this paper investigates how free allocation in the European Union Emissions Trading System affects firms’ ...
2025| Till Köveker, Robin Sogalla
-
DIW Discussion Papers 2132 / 2025
Attitudes toward fiscal policy differ: fiscal conservatism and fiscal liberalism vary in their willingness to tolerate budget deficits. We challenge the view that such attitudes reflect national preferences. Instead, we offer an economic explanation based on a two-country Heterogeneous Agent New Keynesian model, bringing its implicit political economy dimension to the forefront. We compute the welfare ...
2025| Christian Bayer, Alexander Kriwoluzky, Gernot J. Müller, Fabian Seyrich
-
DIW Discussion Papers 2131 / 2025
Competition authorities increasingly rely on economic screening tools to identify markets where firms deviate from competitive norms. Traditional screening methods assume that collusion occurs through secret agreements. However, recent research highlights that firms can use public announcements to coordinate decisions, reducing competition while avoiding detection. We propose a novel approach to screening ...
2025| Tomaso Duso, Joseph E. Harrington Jr., Carl Kreuzberg, Geza Sapi
-
DIW Discussion Papers 2130 / 2025
Different methods of eliciting long-run expectations yield data that predict economic choices differently well. We ask members of a wide population sample to make a 10-year investment decision and to forecast stock market returns in one of two formats: they either predict the average of annual growth rates over the next 10 years, or they predict the total, cumulative growth that occurs over the 10-year ...
2025| Peter Haan, Chen Sun, Felix Weinhardt, Georg Weizsäcker
-
DIW Discussion Papers 2129 / 2025
Mental health and wellbeing are unequally distributed in high-income countries, disadvantaging low-income individuals. Unconditional, regular, and guaranteed cash transfers may help address this inequality by promoting financial security and agency. We conducted a preregistered RCT in Germany, where treated participants received monthly payments of EUR 1,200 for three years. Cash transfers improve ...
2025| Sandra Bohmann, Susann Fiedler, Maximilian Kasy, Jürgen Schupp, Frederik Schwerter
-
DIW Discussion Papers 2128 / 2025
This paper provides empirical evidence on which M&A deals spur innovation, and which stifle it. To do so, we consider not only the product market position of the acquiring firm, but also the position of both target and acquirer in the technology space. Focusing on the antidiabetic drugs market, our dataset tracks the lifecycle and patenting of all individual antidiabetic projects in development between ...
2025| Jan Malek, Jo Seldeslachts, Reinhilde Veugelers
-
DIW Discussion Papers 2127 / 2025
To ensure security of supply in the power sector, many countries are already using or discussing the introduction of capacity mechanisms. Two main types of such mechanisms include capacity markets and capacity reserves. Simultaneously, the expansion of variable renewable energy sources increases the need for power sector flexibility, for which there are promising yet often under-utilized options on ...
2025| Franziska Klaucke, Karsten Neuhoff, Alexander Roth, Wolf-Peter Schill, Leon Stolle
-
DIW Discussion Papers 2126 / 2025
This paper revisits the exporter’s environmental premium (EEP) by incorporating emissions embodied in domestically and internationally sourced intermediate inputs. Combining administrative firm-level data and customs records for German manufacturers with an environmentally extended input-output table and fuel specific emission factors, we document three stylized facts: (i) embodied emissions account ...
2025| Till Köveker, Philipp M. Richter, Alexander Schiersch, Robin Sogalla