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

Research

One in Five Households Did Not Claim Social Benefits Despite Needing Them

One fourth of all private households in Germany suffered income losses at the height of the second pandemic wave. Taking into account the loss of assets, roughly 43 per cent of households faced financial setbacks. Less than a quarter of them claimed state support.

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Research

Parents Suffer from More Mental Stress Than Other Professionals

The mental health risks of COVID-19 and the pandemic-related measures have been a constant topic of public discussion, also in the Netherlands. There, mental health – measured on a scale of 0 to 100 (100 equals perfect health) – declined sharply among employees in the first lockdown, but recovered relatively quickly to levels similar to those before the coronavirus pandemic. The largest decrease in mental health was observed in March 2020, when the first lockdown was imposed.

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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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Savings Behaviour, Financial Literacy, Demographic Change, Pension Systems

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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

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 Increase Slightly, But Remain Strongly Negative

The ZEW Indicator of Economic Sentiment for Germany recorded an increase in the current May 2022 survey, rising 6.7 points to a new reading of minus 34.3 points. The assessment of the economic situation in Germany has worsened again in the current survey. The corresponding indicator dropped 5.7 points to a new level of minus 36.5 points. This is the third decrease of the indicator since the start of the war in Ukraine. The expectations and assessments of the economic situation continue to point to a deterioration of the German economy during the next six months.

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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

Excessive Adherence to Crisis Policies Fosters Zombification of the Economy

As the COVID-19 crisis slowly abates, the EU Member States are now confronted with a new economic crisis as a result of the war in Ukraine. The rapid succession of crises reinforces the need to respond with highly targeted and temporary aid measures to avoid wasting public resources and preserve fiscal buffers. Against this background, a new study by ZEW Mannheim for the European Parliament has examined which Member States have pursued insufficiently targeted policy measures to cushion the pandemic crisis over the past two years and have remained in crisis mode for too long despite economic recovery. Italy, France and Greece in particular have been to slow in scaling down their aid measures. In the case of Germany, the study criticises in particular that the government has adhered to the very generous short-time work rules for too long.

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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

Firms Plan to Maintain Hybrid Working Models After the Pandemic

Many firms in Germany are planning to offer hybrid working arrangements after the end of the COVID-19 pandemic, thus enabling employees to have a part-home, part-office schedule. A business survey conducted by ZEW Mannheim in December 2021 and January 2022 now provides further insights into firms’ expectations about the allocation of working hours in the long-run. In both the information economy and the manufacturing industry, firms are mainly planning to offer hybrid models in which employees work from home 1-3 days per week. The share of employees who will work from home several times a week post COVID-19 is significantly higher than before the pandemic, according to the firms’ estimates.

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Research

COVID-19 Pandemic Is Both an Obstacle and an Impetus for Innovation

German companies reduced their innovation spending by 3.6 per cent to 170.5 billion euros in the first year of the COVID-19 crisis. Twelve per cent of companies did not undertake any innovation activities at all due to the pandemic. At the same time, eleven per cent of the companies invested in additional product innovations in response to the pandemic situation and twelve per cent pushed ahead with additional process innovations. These are key findings of the Innovation Survey 2021, which ZEW Mannheim conducted among German companies on behalf of the German Federal Ministry of Education and Research.

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