Macroeconomics Department Publications

German Economy Remaining Strong amidst Uncertainties: DIW Economic Outlook

Although the economic boom in Germany is over, a recession is not looming. The economy is still expected to grow by 1.0 percent this year despite its recent weaker performance. Consumption remains a mainstay of the economy; the average annual increase in the number of employees is likely to be just under half a million. At 1.5 percent, inflation is barely dampening purchasing power and together with ...

The Global Economy and the Euro Area: Weak International Trade, Robust Domestic Demand: DIW Economic Outlook

The current global economic environment remains harsh. Global growth rates stagnated in the fourth quarter of 2018, particularly affected by foreign trade. DIW Berlin’s forecast indicates global economic growth of 3.7 percent for 2019 and 3.6 percent for 2020. Positive stimuli are expected from catch-up effects (in the European automobile industry, for example) and the continued positive development ...

German Economy Growing despite Uncertainties and Risks; Global Economy Continuing to Cool Down: Editorial

Italy Must Foster High Growth Industries

Italy has yet to recover from the economic consequences of the financial and sovereign debt crisis that began more than a decade ago. In addition to losing 1.4 million jobs across the manufacturing and construction sectors, new industries driving growth across the EU, such as knowledge-intensive services, are instead stagnating in Italy. Previous structural reforms focused on deregulating the labor ...

Growth Rate of German Economy Normalizing after Prolonged Economic Boom: DIW Economic Outlook

The German economy continues to perform well although the boom has ended. However, at 1.5 percent, German GDP will increase this year at a lower rate than expected at the beginning of the year. Nevertheless, concerns about an imminent recession should give way to the assessment that the pace of the German economy is normalizing after years of above-average growth due to robust foreign demand and increasing ...

Global Economy and the Euro Area: Uncertainty Weighs on Trade and Investment: DIW Economic Outlook

The global expansion weakened somewhat in the third quarter while the downside risks have increased. DIW Berlin’s forecast— almost unchanged—indicates an expansion in global economic production of 4.3 percent for 2018 and 3.9 percent for 2019. In 2020, momentum will slow down further to 3.6 percent. In some countries, temporary factors contributed to the economic slowdown. In major advanced economies, ...

Germany’s Economic Boom Is Cooling Off: Editorial

EU Government Bonds and Banks: Home Bias Pervasive throughout Member States but Capital Requirements Differ Greatly

The current banking regulatory framework assigns EU government bonds a risk weight of zero. Since the European debt crisis, there has been increasing controversy over eliminating this equity capital privilege, which is viewed as contributing to the close relationship between state and bank risks. This report analyses the development of home bias—the tendency of major European banks to invest disproportionately ...

Rental Market Regulation over the Last 100 Years in an International Comparison

Residential rental markets regulations have become an integral part of everyday life in Germany as in almost all other countries. The strong house price and rent increases over the past decade have fueled social debate on this issue. Tenant movements worldwide are demanding tighter regulations and advocating for affordable housing as a central civil right. In contrast, those skeptical of regulation ...

EU Immigration Has Increased Germany’s Economic Growth

Immigration to Germany has increased significantly since 2011, primarily due to the immigration of citizens from other euro area countries and those which joined the EU in 2004 and 2007. This increase is mainly attributable to a lack of immigration barriers and the good economic situation on the German labor market compared to other European countries. Model simulations show that GDP growth in Germany ...