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Coronavirus Crisis

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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Phone: +49 (0)621 1235-100
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The coronavirus pandemic is an information problem. If everyone who became infected was immediately aware of this and instantly identifiable as such, preventing the spread of the virus would not be a problem.

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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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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More infos on the coronavirus crisis

Our Experts at ZEW

Dr. Michael Schröder

Topics

Business Cycle, Financial Markets

Prof. Dr. Irene Bertschek

Topics

Digitalisation, Digital Economy

Prof. Dr. Friedrich Heinemann

Topics

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

Dr. Georg Licht

Topics

Firms, Firm Foundations, Innovation Policy, Insolvencies

Jun.-Prof. Dr. Susanne Steffes

Topics

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

Economic Situation Assessed Much More Positively, While Expectations Decline

The ZEW Indicator of Economic Sentiment for Germany decreased in the current June 2021 survey, falling 4.6 points to a new reading of 79.8 points. By contrast, the assessment of the economic situation in Germany improved very significantly, with the corresponding indicator currently standing at minus 9.1 points, 31.0 points higher than in the previous month. The assessment of the economic situation in Germany is now back to the pre-pandemic level of August 2019. Due to the very high economic expectations, the outlook is now much more positive than in summer 2019.

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Forschung

COVID-19 Crisis Negatively Impacts M&A Activities

The coronavirus crisis is hitting companies hard. This also affects M&A deals. The number of mergers and acquisitions (M&A) involving German firms has fallen sharply due to the COVID-19 pandemic. A similar trend can be observed in M&A transactions at the international level. The number of mergers and acquisitions by and with companies based in North America, China or Western Europe decreased significantly as well.

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Research

Loss of Income Due to Coronavirus Pandemic: Risk-Taking Plunges

Individuals who have experienced severe financial losses due to the coronavirus pandemic are significantly less willing to take risks. This particularly appears to be the case for households with a low income. On the contrary, other personality traits, such as patience and locus of control, remain unchanged following financial losses.

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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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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

Strong Rise in Insolvencies Expected Among Smaller Companies and Sole Proprietors

Due to the suspended obligation to file for insolvency, the number of bankruptcies has fallen to a record low in 2020, despite poor business prospects. There is now a threat of a renewed rise in insolvencies in the coming months, mainly in the service and trade sectors. Smaller and older businesses as well as sole entrepreneurs will also record significantly more insolvencies again as the insolvency filing obligation is reinstated.

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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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