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DIW Roundup 107 / 2017
Inflation targeting has become one of the most prominent monetary regimes around the globe. Proponents argue that it reduces the dynamic inconsistency problem of monetary policy and thereby stabilises prices, which in turn promotes growth. Opponents, on the other hand, say that by focusing on price stability inflation targeting neglects other important policy objectives, such as financial stability, ...
2017| Malte Rieth
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DIW Roundup 99 / 2016
The academic literature provides no clear answer to this question. In principle, the recent slowdown in reform activity and fiscal consolidation in the euro area may derive from several developments. Potential reasons involve the end of the economic recession, the provision of financial assistance to crisis countries, and improved financing conditions for governments as a result of unconventional monetary ...
2016| Malte Rieth, Lisa Gehrt
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DIW Roundup 95 / 2016
One of the central results in international economics is that an economy cannot have at the same time independent monetary policy, free capital flows, and a fixed exchange rate. Over the last few years, however, this so-called Mundell-Flemming ‘trilemma’ has increasingly been challenged. It is argued that given the rising importance and synchronization of capital and credit flows across countries and ...
2016| Pablo Anaya, Michael Hachula
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DIW Roundup 93 / 2016
A key challenge for economic policy today is to make the financial system more resilient. The literature finds that high indebtedness (or: leverage), both in the financial and in the real sectors, is a danger to macroeconomic stability and growth. Moreover, the design of the corporate tax system is an important determinant of leverage: in many countries interest paid on debt is tax-deductible while ...
2016| Franziska Bremus, Jeremias Huber
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DIW Roundup 88 / 2015
Despite expansionary central bank action, inflation remains low in the euro area. How much can we expect from the additional stimulus in face of anaemic global growth and declining oil prices? More generally, have central banks lost the ability to steer inflation in a globalised world where external factors have powerful effects on domestic inflation? This roundup summarises the evidence in the literature ...
2015| Malte Rieth
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DIW Roundup 80 / 2015
In den vergangenen zwei Jahren ist die Migration nach Deutschland erheblich gestiegen. Dies ist vor allem auf den außergewöhnlich starken Zuzug von Flüchtlingen zurückzuführen, die in Deutschland Asyl beantragen. Viele von diesen Migranten werden in Deutschland wohl dauerhaft bleiben. Dies stellt das Land vor große Herausforderungen. Sowohl die Integration in die Gesellschaft und in den Arbeitsmarkt ...
2015| Konstantin A. Kholodilin, Dmitry Chervyakov
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DIW Roundup 78 / 2015
The latest long-term projection of Germany’s population implies a clear trend: even though slight growth is expected over the next decade, a decline in the future is almost inevitable. Furthermore, an ageing society combined with a low fertility rate will lead to massive shrinkage of the working-age population. What are the social and economic consequences of these developments? Is a decline in economic ...
2015| Dirk Ulbricht, Dmitry Chervyakov
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DIW Roundup 75 / 2015
Before the 2007 crisis, the trade-off between output and inflation played a leading role in the discussion of monetary policy. Instead, issues relating to financial stability played a less pronounced role in shaping the stance of monetary policy andwere limited to asset price dynamics. This Round-Up argues that the great interest that emerged after the 2007 crisis in the effects of monetary policy ...
2015| Michele Piffer
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DIW Roundup 66 / 2015
Small and medium-size enterprises (SMEs) are highly dependent on bank financing, which is why they have been particularly hit by tighter credit conditions in the aftermath of the global financial crisis. Given that SMEs account for about 60% of value added and 70% of employment in the euro area, they are crucial for economic recovery. Consequently, several policy initiatives have been launched to alleviate ...
2015| Franziska M. Bremus
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DIW Roundup 63 / 2015
In der letzten Dekade kam es bei Rohstoffen zu heftigen Preisschwankungen. Gleichzeitig nahm der Anteil von Finanzinvestoren an Rohstoffterminbörsen erheblich zu. Im Zuge ist eine Diskussion entbrannt, ob Finanzspekulation Rohstoffpreise von ihren fundamentalen Bestimmungsgrößen entfernt. Wissenschaftliche Studien kommen diesbezüglich jedoch zu keinem eindeutigen Ergebnis. Die Politik hat trotzdem ...
2015| Michael Hachula, Malte Rieth