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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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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

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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Research

Herd Immunity Can Only Be Achieved with a Flexible Reimbursement System for Doctors

General practitioners are expected to play a key role in advancing the vaccine rollout in Germany. As the vaccination coverage of the population increases, additional efforts by physicians will be necessary to advance the vaccine rollout and ultimately achieve herd immunity. Doctors who administer COVID-19 jabs therefore need flexible and needs-based reimbursement.

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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

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 Expectations Are Increasing

The ZEW Indicator of Economic Sentiment for Germany increased in the current November 2021 survey, climbing 9.4 points to a new reading of 31.7 points. This is the first time since May that the indicator has recorded a rise. The assessment of the economic situation in Germany has worsened again in the current survey, falling by 9.1 points to a level of 12.5 points.

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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

Companies Expect More Working From Home Post COVID-19

Soon after the outbreak of the COVID-19 pandemic, many companies in Germany expected a long-term expansion of working from home arrangements. A ZEW survey conducted in June 2021 has confirmed the companies’ early forecasts. Some companies have even increased their expectations about the use of working from home after the pandemic ends. The survey also found that many companies, especially larger ones, have equipped their employees with digital devices over the course of the pandemic.

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Research

COVID-19 Tax Aids in Germany Lack Ambition

In Germany, the COVID-19-related tax relief measures taken so far are not ambitious enough to cushion the impact of the crisis. In their current form, they mainly relieve large companies, while small companies and start-ups hardly benefit at all. Further tax measures are therefore necessary to ensure that German companies are able to weather the crisis well.

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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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