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Press Releases

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ZEW on 14.12.2017, 12:00 h
Press Release: ECB Will Have a Hard Task Justifying Its Policy in 2018

As anticipated, the European Central Bank has decided not to make any changes to its policy of zero and negative interest rates. As decided back in October 2017, the ECB will also continue with its bond-buying programme into the new year, halving its purchase volume to 30 billion euros a month. By contrast, the US Federal Reserve announced yesterday that it would be raising interest rates for the third time this year. Professor Friedrich Heinemann, head of the Research Department ?Corporate Taxation and Public Finance? at the Centre for European Economic Research , Mannheim, offers his view on the ECB?s decision. ( more )

IFO on 14.12.2017, 10:30 h
ifo Sharply Increases Growth Forecast for 2018 to 2.6 Percent

The ifo Institute has sharply increased its growth forecast for the year ahead. Instead of the 2.0 percent growth rate forecast to date, researchers now expect to see 2.6 percent growth in 2018. This would mark the highest growth rate seen since 2011. ( more )

ZEW on 13.12.2017, 12:00 h
Press Release: ZEW Researcher Appointed Professor at the University of Giessen

Professor Irene Bertschek, head of the Research Department ?Digital Economy? at the Centre for European Economic Research , Mannheim, was appointed as a professor in the Faculty of Economics and Business Studies at the Justus Liebig University Giessen on 1 December 2017. The joint appointment of Bertschek by the University of Giessen and ZEW will help to strengthen the already close connection between the two institutions. ( more )

ZEW on 13.12.2017, 12:00 h
Press Release: Germany Loses Out in US Tax Reform

US Congress is fast approaching a consensus on a comprehensive tax reform. Though certain details still remain to be decided, it looks like US companies can expect to see their tax bills go down considerably. The reform will also lead to radical changes in how corporations are taxed in the United States. From now on, the US tax authorities will no longer tax the worldwide income of US companies; instead, following the concept of territoriality, only profits generated in the United States will be subject to tax. The Centre for European Economic Research in Mannheim together with the University of Mannheim have conducted a comprehensive study [...] ( more )

IFO on 13.12.2017, 10:00 h
ifo Warns of Drastic Drop in Regional Subsidies in Germany

The ifo Institute has warned of a drastic drop in regional subsidies in Germany. "If existing rules continue to apply, Germany will only be able to grant regional subsidies on a small scale,? explains Joachim Ragnitz, Deputy Executive Director of ifo Dresden. Ragnitz attributes this situation to economic development in Germany, which has been far better than in most other countries in recent years. Brexit will also put the structurally weaker regions of Germany in a relatively better position compared to the EU average. Regions qualify for subsidies depending on their economic power and unemployment rates compared to the EU average. ( more )

ZEW on 12.12.2017, 12:00 h
Press Release: Expectations Decrease Slightly – Outlook Remains Positive

The ZEW Indicator of Economic Sentiment for Germany records a decrease of 1.3 points in December 2017 and now stands at 17.4 points. The indicator thus still remains below the long-term average of 23.7 points. The assessment of the current economic situation in Germany increased by 0.5 points, with the corresponding indicator currently standing at 89.3 points. ( more )

DIW on 12.12.2017, 08:43 h
The potential for green public procurement is still largely unexploited in Germany

Abstract: Public purchases can make a valuable contribution to decarbonizing the economy – Despite an upward trend, only 2.4 percent of public contracts in Germany include green criteria – Policy action is needed in order to fully exploit the potential Green public procurement, by which public authorities choose their suppliers of goods and services not only based on price but also according to environmentally friendly criteria, is still very much underused in Germany, a study by the German Institute for Economic Research (DIW Berlin) shows. Though the practice has been on the rise these past years, its use remains marginal: an [...] ( more )

ZEW on 11.12.2017, 12:00 h
Press Release: Companies in Regions with a Higher Share of Green Voters Invest More in Climate Protection Measures

The success of Germany?s planned ?energy transition? depends largely on how willing companies are to drive innovations in renewable energy forward. New regulations, government subsidies and rising fossil fuel prices are not the only decisive factors for this shift in energy usage. According to a recent study conducted by the Centre for European Economic Research , Mannheim, and the Augsburg University of Applied Sciences, regional factors may also come into play, with German companies located near renewable energy plants and in regions with a high percentage of Green Party voters being more likely to invest in renewable energy. ( more )

IFO on 08.12.2017, 09:00 h
Fuest Calls for Free Trade with Britain

ifo President Clemens Fuest welcomes the latest breakthrough in the Brexit negotiations. ?This is very good news. The EU should now look to sign a comprehensive free trade agreement with Britain to limit the economic costs of its exit from the EU all round,? says Fuest. ( more )

IFO on 07.12.2017, 08:00 h
Hey Big Spender: Don’t Blame Minority Governments

Similar trends emerge in public expenditure and debt ratios regardless of whether minority or majority governments are in power, according to a new study by the ifo Center for Public Finance and Political Economy. Critics of minority governments often express the fear that they are politically instable and expensive for taxpayers; citing the compromises that such governments have to make with opposition parties to gain a parliamentary majority. ( more )

ZEW on 06.12.2017, 12:00 h
Press Release: A European Monetary Fund Could Be Open to Abuse

On 6 December 2017, the European Commission presented its proposals on how to further integrate Europe's Economic and Monetary Union. The roadmap set out by the EU Commission includes, for instance, plans to introduce a European finance minister in 2019 as well as to transform the European Stability Mechanism into a European Monetary Fund with the aim of supporting Eurozone countries in the event of an economic or financial crisis. Professor Friedrich Heinemann, head of the Research Department ?Corporate Taxation and Public Finance? at the Centre for European Economic Research , offers his view on the matter. ( more )

ZEW on 06.12.2017, 12:00 h
Press Release: Financial Crises Slow Down Innovation Activities in Businesses

How much corporate customers of banks invest in innovations largely depends on the financing opportunities provided to them. Financial distress of banks as a result of macroeconomic shocks, however, has an impact on the innovation performance of their corporate clients. In times of tensions on financial markets, businesses most likely reduce their innovation activities if ?their? banks are particularly hard hit by the distortions in the interbank market. These are the findings of a recent study carried out by the Centre for European Economic Research in Mannheim. ( more )

IFO on 06.12.2017, 11:00 h
Fuest: European Commission's Euro Concept Is Misguided

ifo President Clemens Fuest has criticised the European Commission's proposals to reform the Eurozone. ?This concept is not the right way to solve the currency union's problems," he said in Munich. ( more )

DIW on 06.12.2017, 10:00 h
In Germany, approximately 1.8 million workers eligible for the minimum wage are earning less

Abstract: The introduction of the minimum wage in Germany led to significant increases in wages –– However, around seven percent of eligible workers earn less than minimum wage, with the marginally employed and employees at small businesses being particularly affected –– When one also takes into account workers who are not eligible for a minimum wage, such as freelancers, a total of around 4.4 million people in Germany earned less than 8.50 euros gross per hour in 2016 –– Inspection and sanctions mechanisms need to be improved as do methods for recording work hours A new study from the German Institute for [...] ( more )

DIW on 06.12.2017, 08:45 h
Expansive monetary policy: Early exit from bond purchase program could reduce GDP growth and inflation in the euro area

Abstract: The following study from DIW Berlin examines the effects of different exit scenarios from the European Central bank’s bond purchase program on the European economy – exiting early would especially depress the inflation rate What if the ECB were to reduce its bond purchase program by more than what it reported at the end of October? What if it reduced its bond holdings quicker or earlier? DIW Berlin economists Marius Clemens, Stefan Gebauer, and Malte Rieth investigated what implications there would be for economic growth and inflation in the euro area. The European Central Bank has been buying up government bonds from euro [...] ( more )

IFO on 05.12.2017, 11:00 h
Fuest Favours Major Reform of Local Business Tax

ifo President Clemens Fuest favours a major reform of Germany?s local business tax. ?The heavy reliance of Germany?s municipalities on this tax is dangerous,? he said in Berlin. ( more )

ZEW on 04.12.2017, 12:00 h
Press Release: Social Benefit Recipients and Indebted Households Most Likely to Be Affected by Power Cut-Offs

According to official statistics, in 2016 around 330,000 households in Germany had their power cut off because of unpaid energy bills. In this respect, families with children are much more likely to be affected than other consumers. This also holds for recipients of basic unemployment benefits since they have an increased risk of falling behind with their payments. As a consequence, the probability of receiving disconnection notices and facing electricity cut-offs is higher for these households than for others. Individuals with a low level of education as well as single-person households have a small chance of averting impending power cut-offs. [...] ( more )