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Economic outlook: consumer spending and growth strengthen the economy

Joint Economic Forecast Spring 2024: Headwinds from Germany and abroad: institutes revise forecast significantly downwards

According to Germany’s five leading economic research institutes, the country’s economy shows cyclical and structural weaknesses. In their spring report, they revised their GDP forecast for the current year significantly downward to 0.1 percent. In the recent fall report, the figure was still 1.3 percent. Expectations for the coming year are almost unchanged at 1.4 percent (previously 1.5 percent). ...

Economic Outlook 2024

Joint Economic Forecast: Purchasing power returns ‒ political uncertainty high

According to the Joint Economic Forecast, Germany's gross domestic product declines by 0.6% in 2023. This is a strong downward revision of 0.9 percentage points from the forecast made in spring 2023. "The most important reason for this revision is that industry and private con­sumption are recovering more slowly than we expected in spring," says Oliver Holtemöller, Vice President and Head of the Macroeconomics ...

Estimating the Marginal Costs of Road Renewals: Evidence from a Duration Approach

Within an analytical approach that mirrors the relationship between road deterioration, traffic load, and road renewal, we estimate the marginal costs of road renewals as part of a social marginal cost scheme for road charging. Based on a comprehensive data set for German motor ways, we estimate a Weibull dura tion model with shared frailties that account for unobserved heterogeneity, including covariates ...

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 ...

German Economy Currently Scarcely Making Headway

Following the winter recession and stagnation in the second quarter of 2023, the economic upswing is proceeding at a sluggish pace, contrary to expectations over the summer. Weak foreign demand and ongoing inflation have proven to be slowing economic growth. For the time being, private consumption is not driving the German economy and is likely to develop in the second half of 2023 only haltingly. ...

DIW Berlin Economic Outlook: Global Economy Recovering Swiftly; German Economy Gaining Momentum

The German economy began recovering at the beginning of 2024 and has developed better than initially expected. A sharp rise in construction investment, albeit more of a flash in the pan as a result of mild winter weather, along with strong goods exports helped the economy onto its recov¬ery path and masked the disappointing development of private consumption, which sank unexpectedly. However, consumer ...

Determinants of Stock Market Participation

The low degree of stock market participation (SMP) is one of the big puzzles in finance. Numerous determinants have been proposed. We put these determinants into a structure that is derived from a standard static portfolio model. Then we discuss arguments put forward regarding specific SMP determinants and the empirical evidence that has been provided. The focus of our survey is on the identification ...

Agglomeration Economies: Different Effects on TFP in High-tech and Low-tech Industries

We study the impact of agglomeration effects on firms’ total factor productivity (TFP) for industry groups defined by technology intensity. This allows for non-uniform effects on firms depending on their technological level. We find that urban economies have the largest impact on firm productivity in high-technology industries, while they have no effectin low-technology industries. For firms in the ...