Macroeconomics Department Publications

New Government’s Policies Give the Thriving German Economy an Additional Boost

The German economy will grow by 2.4 percent this year, especially due to strong foreign demand. Brisk investment activity continues in this economic climate; stimulus from foreign trade, however, is weakening somewhat. Despite strong consumer demand in the coming quarters, employment and economic output growth are losing momentum. However, stimulus measures from the new federal government will increase ...

The Global Economy and the Euro Area: Expansion Continues but Is Losing Momentum

The global economy is likely to grow by over four percent this year and somewhat less next year. DIW Berlin has slightly raised its forecast for both years. Developed economies as well as emerging markets are experiencing an upturn; however, growth rates are likely to be slightly lower in the future. One reason for the sound global economy is the fact that the labor market situation is steadily improving, ...

New Government Prolongs German Economic Upswing: Editorial

German Right-Wing Party AfD Finds More Support in Rural Areas with Aging Populations

This study examines in which setting the German political party Alternative for Germany (Alternative für Deutschland, AfD) performed well in the 2017 parliamentary elections. The AfD’s popularity was relatively high in electoral districts with an above-average amount of craft businesses, a disproportionately high amount of older residents and workers in the manufacturing sector, and—applicable mainly ...

German Economy: Upswing Has Gained Breadth but Will Not Hold Pace: DIW Economic Outlook

The upswing of the German economy continues and since the beginning of 2017, even at a somewhat faster pace. Sharp gains in employment are still driving consumption. And companies are investing significantly more in machines and facilities. Many global risks that previously limited the propensity to invest—in Germany and many other countries—have vanished. And the euro area is also finally feeling ...

The World Economy and the Euro Area: Global Upswing Remains Intact for the Time Being: DIW Economic Outlook

The global economy is expected to grow by four percent annually over the next two years. This is a slight increase in the German Institute for Economic Research forecast in comparison to that of the fall. The upswing will gain momentum in both developed and emerging economies. Private consumption will play a pivotal supporting role as investment continues to grow rapidly around the globe. Despite the ...

German Economy Booming but Not to the Point of Overheating: Editorial

Early Exit from ECB Bond Purchase Program Could Reduce GDP Growth and Inflation

The European Central Bank is planning a gradual reduction of government bond purchases under the asset purchase program it initiated in 2015. The present study by the German Institute for Economic Research analyzes the potential macroeconomic implications of different exit strategies. The authors examined the potential effects of a reduction in net purchase volume, an early exit, and a faster exit ...

German Economy Still Running at High Capacity: DIW Economic Outlook

The German economy is on track for continued growth. Due to the unexpectedly robust first six months of 2017, the German Institute for Economic Research is raising its forecast for GDP growth to 1.9 percent for the current year. This year and arguably for the coming two years, the country’s output will exceed potential output; nonetheless, there is no risk of overheating. Economic growth will slow ...

The World Economy and the Euro Area: Broad-Based Upswing: DIW Economic Outlook

This year and next, global GDP will grow more strongly than expected. The growth rate should be just under four percent. In developed economies, the continuing improvement in the job market situation will drive consumption. Corporate investment activity will also gain momentum. Over the forecast horizon, a slowly rising inflation rate and somewhat tighter monetary policy will gradually slow private ...