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German Economy: Slowdown in Sight

Compared to last year, the German economy is weakening noticeably. Orders from abroad are decreasing and domestic companies are holding back on investments. However, capacity utilization remains high—also because the government will boost the incomes of private households next year. However, above all, incomes are rising noticeably due to the positive situation in the labor market: the unemployment ...

The Term Structure of Redenomination Risk

This paper assesses redenomination risk in the euro area. We first estimate daily default-risk-free yield curves for French, German, and Italian bonds that can be redenominated and for bonds that cannot. Then, we extract the compensation for redenomination risk from the yield spreads between these two types of bonds. Redenomination risk primarily shows up at the short end of yield curves. At the height ...

Common Ownership and Market Entry: Evidence from Pharmaceutical Industry

Common ownership - where two firms are at least partially owned by the same investor - and its impact on product market outcomes has recently drawn a lot of attention from scholars and practitioners alike. Theoretical and empirical researchsuggests that common ownership can lead to higher prices. This paper focuses on implications for market entry. To estimate the effect of common ownership on entry ...

The Impact of Institutions on Bank Governance and Stability: Evidence from African Countries

This paper sheds new light on how African countries’ legal systems and institutions influence the governance and stability of their banks. We find that institutional factors, in particular the legal family of origin, political stability, contract enforcement and strength of investor protection promote central corporate governance reforms. Using a difference-in-difference approach, we also reveal that ...

Later pension, poorer health? Evidence from the new State Pension age in the UK

A stabilization fund can make the euro area more crisis-proof

Reorganizing European fiscal policy is a main topic in current reform considerations. In particular, the creation of a European stabilization mechanism is being discussed. This study examines the macroeconomic effects of a stabilization fund, the economic consequences of which are analyzed in an equilibrium model. The model shows that a stabilization fund reduces economic fluctuations and is thus a ...

A Stabilization Fund Can Make the Euro Area More Crisis-Proof

Reorganizing European fiscal policy is a main topic in current reform considerations. In particular, the creation of a European stabilization mechanism is being discussed. This study examines the macroeconomic effects of a stabilization fund, the economic consequences of which are analyzed in an equilibrium model. The model shows that a stabilization fund reduces economic fluctuations and is thus a ...

The Short-Run Employment Effects of the German Minimum Wage Reform

We assess the short-term employment effects of the introduction of a national statutoryminimum wage in Germany in 2015. For this purpose, we exploit variation in the regionaltreatment intensity, assuming that the stronger a minimum wage “bites” into the regionalwage distribution, the stronger the regional labour market will be affected. In contrastto previous studies, we draw upon detailed individual ...

Upward and downward Social Mobility Probabilities Have Converged for Men and Women

This study investigates professional social mobility, i.e., changes in one’s occupational status compared to that of their parents. It uses data from the German Socio-Economic Panel (Sozio-oekonomisches Panel, SOEP) on middle-aged, western Germans who were born between 1939 and 1971. On average, social status relative to parents has increased (absolute social mobility). However, looking at how positions ...

Income Distribution in Germany : Real Income on the Rise since 1991 but More People with Low Incomes

Between 1991 and 2015, the real disposable, needs-adjusted income of persons in private households in Germany rose by 15 percent on average. The majority of the population has benefited from the growth in real income, but the groups at the lower end of the income distribution have not. Inequality in both market and disposable needs-adjusted household income has remained high. These are the findings ...