Overview publications

Zeitenwende in German-Chinese Trade Relations?

Evidence from German Firms

Andreas Baur and Lisandra Flach

The Russian attack on Ukraine in February 2022 marked not only a turning point (Zeitenwende) for German security policy but also for German foreign economic policy. From a European standpoint, the war served as a painful reminder of how economic dependencies can be used as political leverage, bringing the geopolitical dimension of trade relations and economic interdependencies into public focus. In particular, economic ties with the People’s Republic of China are increasingly being scrutinized. The ifo Institute conducted a representative survey with German firms in February 2024 to assess changes in their reliance on Chinese inputs since the outbreak of the war and firms’ plans regarding their supply relationships with China.

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Rise of Populism: Causes, Consequences and Policy Implications?

Sergei Guriev, Florian Dorn, David Gstrein and Florian Neumeier, K. Peren Arin, Efstathios Polyzos and Marcel Thum, Eugenio Levi and Steven Stillman, Manuel Funke, Moritz Schularick and Christoph Trebesch, Luisa Dörr, Niklas Potrafke, Felix Rösel and Tuuli Tähtinen, Vincenzo Galasso, Gylfi Zoega, Massimo Morelli

Populism is on the rise. It goes hand in hand with far-left or far-right party slogans and/or strong, personalized political leadership and polarized rhetoric: The presidency of Donald Trump in the US and the campaigns for the Brexit referendum are two prominent examples in recent years. Several EU member states, namely France, Italy, Spain, Portugal, Hungary, Greece, Austria, the Netherlands, Sweden, and Germany, have experienced how quickly populists win voters in national elections. With the presidential election in the US and European elections in 2024, many people fear a further rise in political polarization and populism in the Western world.

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Semantic Shifts in EU Competition Law: A Data-driven Study of Policy Goals

BIG-DATA-BASED ECONOMIC INSIGHTS

Anselm Küsters

Since its inception, European competition law has been a battleground for different interpretations and ideologies. As a result, concepts ranging from market integration and individual freedom to socially optimal market structures have constantly vied for influence alongside efficiency-oriented arguments reminiscent of the Chicago School. This tapestry of ideas underscores the multifaceted nature of competition policy – a policy that is inextricably linked to the specific “DNA” of its legal regime and its hierarchy of policy goals. In order to dissect and understand this DNA for the European case, this article uses natural language processing (NLP), also known as text mining, to examine over 11,000 EU competition law decisions and judgments from 1961 to 2021.

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A World Unprepared: Missing Skills for Development

ECONOMIC POLICY AND ITS IMPACT

Sarah Gust, Eric A. Hanushek and Ludger Woessmann

How far away is the world from ensuring that every child obtains at least basic skills? And what would it mean for world development to reach the goal of global universal basic skills? This article addresses these two intertwined questions in a new study. The authors draw on the individual-level test data from available international and regional student assessments to develop world estimates of the share of children not achieving basic skills in each country and then show the economic costs of these deficits.

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Pandemics, Payments and Fiscal Policy: Lessons from Four Years after the Outbreak of Covid-19

BIG-DATA-BASED ECONOMIC INSIGHTS

Gerome Wolf

The outbreak of an unprecedented global health crisis about four years ago put the very foundations of our communities, economies and politics to the test. Policymakers had to learn and react fast to limit human and economic costs at the same time. This article highlights the importance of existing markets, technological features such as payments systems and economic decisions at the transactional level in combating the spread of a contagious disease while stabilizing aggregate economic activity.

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Inequality Trends in the Context of Changes in Labor Market Outcomes, Composition and Redistribution in Germany

INSTITUTIONS ACROSS THE WORLD

Maximilian Blömer, Elena Herold, Max Lay, Andreas Peichl, Ann-Christin Rathje, Paul Schüle and Anne Steuernagel

With ongoing demographic and economic changes, documenting the distribution of economic resources within a society is a recurring task for applied economic research that can never be considered complete. In Germany, several studies have investigated trends in earnings and income inequality in the past few years. However, a recent and comprehensive account of inequality in Germany that also considers dimensions other than earnings and income inequality is currently not available. This article documents the development of inequalities in Germany over the years from 1983 to 2020.

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Watts Next: Securing Europe’s Energy and Competitiveness

Where the EU’s Energy Policy Should Go Now

Frédéric Gonand, Pedro Linares, Andreas Löschel, David Newbery, Karen Pittel, Julio Saavedra, Georg Zachmann

Russia’s invasion of Ukraine in February 2022 led to gas supply in Europe dropping significantly, shaking the EU out of its complacency regarding energy procurement and consumption habits. The costs of going green on top of more expensive energy are putting a strain on European competitiveness, with higher energy prices hitting the chemical, steel and metal processing industries in countries like Germany, Spain or Poland particularly hard.

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Economic Causes for the Rise of Populist and Nationalist Movements

Florian Dorn, David Gstrein and Florian Neumeier

In recent years, radical right-wing political groups and populist movements have strongly gained popularity in many Western democracies. The presidency of Donald Trump and the increasing political polarization in the US, the Brexit vote in the UK, as well as the electoral successes of nationalist parties in many Western countries – such as the Alternative für Deutschland (AfD) in Germany, Rassemblement National in France, the Sweden Democrats, or the Movimento 5 Stelle, Lega, or Fratelli d’Italia in Italy – serve as evidence of this trend. One of the key features of many of these movements is an anti-establishment, anti-immigration, and anti-globalization rhetoric. In this article, we summarize the existing literature studying the extent to which economic causes contribute to the rise in populism.

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Climate Policy Priorities for the Next European Commission

Clemens Fuest, Andrei Marcu, Michael Mehling

From the earliest announcement of the European Green Deal, the current EU political cycle has been defined by an unprecedented acceleration in the scale and pace of climate policy. Under difficult conditions that sometimes tested the ability to engage stakeholders, including various external shocks, the EU has put forward and largely passed an unprecedented legislative agenda, which was meant to have, and is having, deep impacts on the EU economy and society at large. Much has changed in the world since the European Green Deal and the “Fit for 55” packages were conceived, including a dramatic increase in industrial policy actions by Europe’s trade partners, a deteriorating geopolitical landscape, and an energy crisis that has been aggravated by these factors, all of which has led to persistent fiscal and economic pressures. 

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Monitoring the Impact of Sanctions on the Russian Economy

Quarterly Report Vol. 2

Vasily Astrov, Lisa Scheckenhofer, Camille Semelet, Feodora Teti

In 2023, Russia experienced a 3.5% economic growth, but forecasts for 2024 indicate a slowdown to 1.5% due to tightened monetary policies and the expected global economic slowdown. Despite large military spending and Western energy sanctions eroding budget revenues, fiscal deficits have been generally kept under control. Intensified scrutiny of third-country firms violating energy sanctions widened discounts on Russian oil prices in late 2023. Generally, Russian import patterns remained relatively stable. In particular, EU exports of economically critical and common high priority goods to Russia in November 2023 represent just 2% of its prewar levels, underscoring the effectiveness of sanctions in halting direct exports. Besides China and Hong Kong, Türkiye and CIS countries became vital suppliers, meeting Russia's demand for economically critical goods and high-priority items.

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