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DIW Economic Outlook: German Economy Fighting Its Way out of Winter Recession

The German economy has returned to a recovery course following a slight recession over the winter. Although the war in Ukraine, record inflation, and feared gas shortages have taken their toll on the German economy, a drastic slump failed to materialize. The German economy remained relatively unscathed, only experiencing a slight recession over the past six months; in the final quarter of 2022 and ...

Geographical Balancing of Wind Power Decreases Storage Needs in a 100% Renewable European Power Sector

To reduce greenhouse gas emissions, many countries plan to massively expand wind power and solar photovoltaic capacities. These variable renewable energy sources require additional flexibility in the power sector. Both geographical balancing enabled by interconnection and electricity storage can provide such flexibility. In a 100% renewable energy scenario of twelve central European countries, we investigate ...

Gender differences and stereotypes in media coverage of company board members

Women continue to be underrepresented in leadership positions in the corporate sector such as on company boards. One of the reasons for this underrepresentation are gender stereotypes on the skill distribution, social and occupational roles, personality traits, and how they affect labor market decision making. Media plays an important role in transporting gender stereotypes. In this paper we...

When Credit Turns Political: Evidence from the Spanish Financial Crisis

This paper provides causal evidence on the effect of credit crunches on political polarization. We combine data on bank-firm connections and electoral outcomes at the city-level during the 2008-2014 Spanish Financial Crisis. First, we show that firms in a relationship with weak banks experience a reduction in their loan supply and employment growth. Next, we estimate the effects of unemployment on ...

Facilitating the Transport and Heating Transition: Strengthen Carbon Pricing, Introduce a Climate Dividend, and Reduce Adaptation Costs

Despite the easing of prices on the energy markets, private households continue to be burdened by elevated prices. The planned increase the planned increase in the carbon price for transport and heating will raise the burden on private households even further. These additional costs are unequally distributed and have a regressive effect, as poor households must spend much more relative to their net ...

Short-time Work vs. Unemployment: Gendered Differences in Labour Market Outcomes

In the recent economic crises, Germany has made use of job retention schemes and in particular short-time work benefits ('Kurzarbeit') to tackle shocks in labor demand. Under these schemes, workers have not been laid off and received unemployment benefits, but reduced their working hours (or stopped working) for a limited amount of time while receiving short-time leave benefits. While the effect...

Higher fossil fuel prices and a climate dividend: burdens on and relief of households

The Heterogeneous Effects of Social Assistance and Unemployment Insurance: Evidence from a Life-Cycle Model of Family Labor Supply and Savings

We empirically analyze the heterogeneous welfare effects of unemployment insurance and social assistance. We estimate a structural life-cycle model of singles' and married couples' labor supply and savings decisions. The model includes heterogeneity by age, education, wealth, sex and household composition. In aggregate, social assistance dominates unemployment insurance; however, the opposite holds ...

Managing Public Debt and Economic Challenges

Join us for an insightful presentation on the global impact of COVID-19 on public debt and the challenges it poses for policymakers. This lecture explore the effectiveness of different approaches to reducing debt-to-GDP ratios, considering econometric analyses and historical experiences. Followed by a discussion. Key findings include: Fiscal consolidations: Timely and well-designed fiscal...

Selective Bond Purchases – May the ECB Chose Winners and Losers?

The European Central Bank (ECB) is currently facing major challenges. Fragmentation of government bond yields across Member States of the European Economic and Monetary Union, based on different economic and fiscal policies, hampers a uniform transmission of monetary policy. At the same time, climate-related financial risks need to be addressed. In recent years, the ECB is meeting these challenges ...