Comment
Federal Reserve Bank | Interest Rate | Interest rate policy | United States | Monetary Policy | Monetary policy decisions

The US Federal Reserve decided to keep its benchmark rate in a range between 1.0 and 1.25 per cent in September 2017. At the same time, the Fed announced that it will start shrinking its $4.5 trillion balance sheet in October. With the interest rate outlook remaining unchanged, another rate hike is likely to happen this year. Professor Friedrich Heinemann, head of the “Corporate Taxation and Public Finance” Research Department at the Centre for European Economic Research (ZEW) in Mannheim, comments on the Fed's latest decision.

ZEW Indicator of Economic Sentiment
ZEW Indicator of Economic Sentiment | Business survey | Germany | Business Cycle | Short-term forecast | Cyclical indicator | Business cycle research | ZEW Financial Market Survey
ZEW Indicator of Economic Sentiment for Germany, September 2017

The ZEW Indicator of Economic Sentiment for Germany improved in September 2017. Climbing 7.0 points compared to the previous month, the indicator now stands at 17.0 points. The indicator, however, still remains below the long-term average of 23.8 points.“The solid growth figures in the second quarter of 2017 in combination with a steep rise in bank lending and increasing investment activities by both the government and private firms are likely reasons for the financial market experts’ significantly more positive outlook compared to that of last month. Their expectations are further corroborated by stable global economic development. The German federal elections do not seem to have been a source of uncertainty. The worries about the recent strengthening of the euro has, for now, also faded into the background,” comments ZEW President Professor Achim Wambach.

Comment
European Union | Eurozone | European Integration and EU Policy | EU Commission

In his address, President of the European Commission Jean-Claude Juncker has called for the introduction of the euro in all EU Member States. Professor Friedrich Heinemann, head of the "Corporate Taxation and Public Finance" Research Department at the Centre for European Economic Research (ZEW) in Mannheim, comments on Juncker's proposal for non-eurozone countries to join the EU's common currency.

Comment
Monetary policy decisions | Interest Rate | Interest rate policy | Monetary Policy | ECB
In August 2017, the ECB decided to leave its base rates unchanged, with the headline deposit rate remaining at minus 0.4 per cent and the marginal lending rate at 0.25 per cent.

As expected, the European Central Bank (ECB) announced today that, once again, it would not be adjusting its base rates, nor would it be making any changes to its outlook on interest rate policy. The outlook on the bond purchase programme remains equally unchanged from July’s communiqué, as the ECB confirmed the programme’s continuation. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW) in Mannheim, offers his view on the ECB’s decision:

Research
Consumer goods industry | Film industry | Competitive strategy
The decision to reschedule a release date tends to increase overall sales in the United States – this is, however, no guarantee for a star on the Hollywood Walk of Fame.

The release date of a movie in the United States is likely to be changed when competition is particularly high due to a number of other high-quality movies that are set to hit screens in the same week. In this context, competition from movies by the same director or within the same genre have the greatest influence on box office revenue. If competition is high, the decision to reschedule the release of a movie tends to increase its overall sales by up to six million dollars compared to the sales the movie would have generated with its original release date. These are the results of a study by the Centre for European Economic Research (ZEW), Mannheim, on competitive effects in product niches regarding the timing of product releases of so-called experience goods.

China Economic Panel
China Economic Panel | Business survey | Greater China | Short-term forecast | Cyclical indicator | China
In August, the CEP Indicator has slightly improved and is now at exactly 0.0 points.

According to the current survey for August (8-23 August 2017), the economic outlook for China has improved again, rising by 4.1 points. The CEP Indicator, which reflects the expectations of international financial market experts regarding China's macroeconomic development over the coming twelve months, is currently at exactly 0.0 points and thus far below the long-term average of 5.0 points.

Guests at ZEW
Delegation | China | Nobel prize | Visiting Researcher
Following this year’s “6th Lindau Meeting on Economic Sciences”, a 15-member delegation of Chinese doctoral and postdoctoral students visited ZEW.

Following this year’s “6th Lindau Meeting on Economic Sciences”, a 15-member delegation of Chinese doctoral and postdoctoral students visited the Centre for European Economic Research (ZEW) in Mannheim. ZEW was the first stop of a one-week trip across Germany organised by the German Research Foundation (DFG) for excellent young Chinese economists who had previously attended the “Lindau Meeting on Economic Sciences”. Three young ZEW researchers were able to secure the much-coveted tickets for the Meeting at Lake Constance: Dr. Nicolas Fugger, Sebastian Blesse and Maximilian Todtenhaupt.

Research
Income and Wealth | Income distribution | Germany | Social market economy
The increasingly unequal income distribution and a higher at-risk-of-poverty rate are posing a threat to an inclusive distribution of economic prosperity in Germany.

“Welfare for all” is the guiding principle of Germany’s social market economy. At least since the German reunification, it has, however, become apparent that there is a yawning gulf between aspiration and reality. Despite steady economic growth, the poorest 40 per cent of the population hardly benefit from prosperity gains, while the income of high earners increased on average by 1.3 per cent per year between 1991 and 2014. These are the findings of a recent study carried out by the Centre for European Economic Research (ZEW) in Mannheim on behalf of the Bertelsmann Stiftung.

ZEW Indicator of Economic Sentiment
ZEW Financial Market Survey | Europe | Business Cycle | Cyclical indicator | Short-term forecast | Germany | Business survey | Business cycle research | ZEW Indicator of Economic Sentiment
ZEW Indicator of Economic Sentiment for Germany, August 2017

The ZEW Indicator of Economic Sentiment for Germany fell considerably by 7.5 points in August 2017 and now stands at 10.0 points. The indicator thus remains significantly below the long-term average of 23.8 points. The assessment of the current economic situation in Germany increased slightly by 0.3 points in August. The corresponding indicator now stands at 86.7 points.

Research
Digitisation | Enterprise | Service industry | Productivity | Economic crisis | ICT
Companies investing in digital technologies are better equipped to overcome economic crises.

Companies with a high degree of digitalisation were less affected by the economic crisis of 2008 and 2009 than companies with a low digitalisation level. This holds particularly for companies in the service sector. These are the findings of a recent study carried out by the Centre for European Economic Research (ZEW) in Mannheim.

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