The lung disease Covid-19 has been spreading rapidly from China since the end of 2019. Millions of people worldwide have been infected with the coronavirus. In addition to the health consequences, the pandemic is causing great damage to our economy. On our theme page you will find relevant ZEW findings on the coronavirus crisis. Our researchers are analysing the threat the coronavirus pandemic poses to companies, and the increased use of remote work, among other things. In addition, we investigate economic and growth effects for Germany, Europe, China and the global economy, and evaluate the measures of the European Central Bank (ECB) in the fight against the virus.

Achim Wambach
ZEW President

Prof. Achim Wambach

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The second wave is here, and the coronavirus will not go away any time soon. We need to find better ways to encourage sustainable practices in times of the coronavirus.

Statements and Opinions

Forschung

Increase in COVID-19 Infections After ‘Querdenken’ Protests

The ‘Querdenken’ or ‘Lateral Thinkers’ protests in November 2020 led to a sharp increase in coronavirus infections in Germany. This is shown by a recent study by ZEW Mannheim and the Humboldt University of Berlin, which analyses the impact that the two large ‘Querdenken’ rallies that took place in November 2020 had on the seven-day incidence rate by the end of December.

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Statement

The Power of Competition Could Speed up the Production of Vaccines

Germany’s Vaccination Summit is taking place today in Berlin. Among the topics on the agenda is the vaccine shortage, which is currently the subject of much discussion. In an article in today’s edition of German business daily “Handelsblatt”, ZEW President Professor Achim Wambach and head of the “Market Design” Research Department, Professor Vitali Gretschko, argue for greater competition to speed up vaccine production.

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Questions & Answers

Pretty Much Every Other Mainstream App Collects More Sensitive User Data

According to information provided by the Robert Koch Institute (RKI), the coronavirus contact-tracing app has been downloaded more than 18 million times. In light of the rise in infection rates, there is hope that the app will facilitate the tracking of chains of infection in the cold winter months ahead and that it will help to control outbreaks of the virus. In the following interview, Dr. Dominik Rehse, head of the Junior Research Group “Digital Market Design”, speaks about how the app has performed up until now and what is needed in order for it to be effective in protecting individuals from infection.

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Questions & Answers

Using the Short-Term Push Towards Digitalisation for Long-Term Investments

The coronavirus has hit the world economy hard, with the lockdown having paralysed public life for weeks in many countries. But even with the lockdown easing up, hygiene and distance regulations still make it difficult to work together, shop, and use business services.

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Coronavirus Crisis: Where Do We Stand?

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Taking the right steps now to get out of the crisis in good time: ZEW President Achim Wambach on the coronavirus crisis (in German with English subtitles).

Our Experts at ZEW

Topics

Business Cycle, Financial Markets

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Digitalisation, Digital Economy

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EU Subjects, Federalism, Monetary Policy, Public Finance, Taxes

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Firms, Firm Foundations, Innovation Policy, Insolvencies

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Human Resources Management, Flexible Working Hours Arrangements, Remote Work

Economic Development

In addition to the major health risks, the extent of the economic consequences of the coronavirus for the German, European and global economy cannot yet be fully predicted. It is clear from today’s perspective that the pandemic has the potential to cause a serious negative economic shock. The economic risks are so great because this pandemic simultaneously disrupts supply and demand. As a result, there will be a dramatic decline in all face-to-face services in the affected regions. It remains to be seen to what extent the ECB’s monetary policy measures will be able to stabilise the eurozone.

ZEW Indicator of Economic Sentiment

Expectations Continue to Increase

The ZEW Indicator of Economic Sentiment for Germany increased again in the current March 2021 survey, climbing 5.4 points to a new reading of 76.6 points compared to February. This means that since December 2020, the indicator has recorded a rise of more than 20 points.The assessment of the economic situation in Germany is also more positive than in the previous month, and currently stands at minus 61.0 points, 6.2 points higher than in February. The assessment of the situation has thus slightly improved by 5.5 points since December 2020.

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Information Economy

ICT Sector Faces Economic Downturn

The economic sentiment in the information and communication technology sector (ICT) in Germany fell to a historic low in the first quarter of 2020. The ZEW sentiment indicator for the companies in the ICT sector plunged to a reading of 51.1 points as a result of the coronavirus pandemic, falling by more than 17 points compared to the previous quarter. This is the worst assessment of the economic climate and the sharpest drop recorded since the survey was started in 2011.

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China Economic Panel

Expectations for China Decline, But Outlook Remains Positive

In the March 2021 survey (9–17 March 2021), the CEP indicator decreased by 21.2 points to a new value of 42.8 points. Despite this sharp decline, the indicator remains at a very high level. The CEP indicator, based on the China Economic Panel (CEP) and conducted by ZEW Mannheim in cooperation with Fudan University, Shanghai, reflects the economic expectations of international financial market experts for China on a 12-month basis.

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Working World and Businesses in Germany

How does the coronavirus pandemic affect the way we work? Are German companies at risk? And where do we find unused potential? Our ZEW researchers show that the coronavirus crisis is changing our working world. Working from home arrangements, for example, are experiencing an unexpected boost. Furthermore, our research results show that the corona pandemic threatens the existence of companies. Many, especially smaller companies, have too low a credit rating to be able to cope with longer closures.

Research

COVID-19 State Aid Leads to Dangerous Backlog of Corporate Insolvencies

As a recent study by ZEW Mannheim shows, the untargeted financial support has contributed to a backlog of corporate insolvencies. In particular, very small, financially weak companies, which under normal economic circumstances would have been highly likely to file for insolvency, were kept alive without the prospect of successful recovery.

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Research

COVID-19 Crisis Hampers Companies’ Innovation Activities

The current annual report from the Commission of Experts for Research and Innovation (EFI) that was delivered virtually to Chancellor Merkel today, analyses the impact of the coronavirus crisis on research and innovation (R&I) activities of companies and comments on the current R&I policies implemented by the government.

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Research

Companies Plan to Keep Remote Work Arrangements After Crisis

In light of the changes to organisational processes that businesses have had to make due to the COVID-19 pandemic, many firms have realised that there are more tasks that can be carried out from home than previously expected. In the business-related services sector, more than 50 per cent of companies – and in the manufacturing sector, more than 40 per cent – are reporting such digital learning effects. “The widespread recognition among firms that many more tasks can be performed remotely than previously assumed reinforces the impulse the coronavirus crisis is giving to increasing mobile work. Because of these new experiences and insights, many companies are planning to use remote work more regularly after the crisis than they did before,” says Dr. Daniel Erdsiek, a researcher in ZEW’s “Digital Economy” Department.

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Research

High Level of Digitalisation Can Help Overcome the Crisis

The coronavirus pandemic is having a major impact on the economy, with solo self-employed workers being particularly hard hit by the crisis. In a ZEW expert brief based on a survey among more than 16,000 full time self-employed individuals without employees, researchers analysed how these workers are affected by the coronavirus pandemic and in which ways digitalisation can help overcome the crisis.

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