Latest Press Releases

The Federal Statistical Office today released its first estimate of the decline in gross domestic product (GDP) in 2020. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter:

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The coronavirus pandemic puts a considerable strain on public finances in Germany. Nevertheless, amid the crisis, a large and stable majority of state parliament members is backing the debt brake: Just over two thirds of the state MPs are in favour of returning to a balanced budget after the coronavirus pandemic. However, more than half of respondents say they are open to reforming the debt brake to allow larger deficits for investment. This is the result of a survey conducted by ZEW Mannheim and the University of Mannheim among members of all 16 German state parliaments in the period between May and July 2020.

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A high number of university students also leads to an increased number of dropouts. The income of persons in Europe who dropped out of university is on average eight per cent higher than that of employees who have never been enrolled in higher education; at the same time, it is 25 per cent lower than the income of people who left university with a degree. The latter also have significantly better employment opportunities than dropouts. This is the result of a study conducted by Dr. Francesco Berlingieri and Theresa Bolz from the Research Department “Labour Markets and Human Resources” at ZEW Mannheim. Using data from 18 European countries, the researchers have examined the income and employment situation of people who dropped out of higher education. In some cases, the study has revealed some considerable differences between the various countries.

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Germany’s eventful six-month presidency of the Council of the European Union has now concluded with a trade deal with the UK and the prospect of an end to the seven-year negotiations between the EU and China on an investment agreement. Under Germany’s presidency, Europe also saw the adoption of both the COVID-19 recovery plan as well as the multiannual financial framework. The president of ZEW Mannheim, Professor Achim Wambach, comments on this matter:

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The European Union and the United Kingdom have agreed on a last-minute trade deal after tense negotiations. The president of ZEW Mannheim, Professor Achim Wambach, comments on this matter: “It is a relief that the wrangling over the withdrawal agreement and trade deal has finally been concluded, and that the incertitude has now come to an end. The agreement provides greater predictability and certainty for future trade relations between the EU and the UK.

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Expenditure on research and development (R&D) has increased significantly in Germany and China in recent years. The resulting output growth is, however, lower than expected in both countries. “This indicates that research productivity in both economies is too weak,” explains Dr. Philipp Boeing, senior researcher and China expert at ZEW Mannheim. In a ZEW policy brief published today, he and Paul Hünermund, PhD, assistant professor at the Copenhagen Business School, have analysed how investment in R&D is related to research productivity in Germany and China. They conclude that in order to achieve sustained growth rates in Europe, “an innovation policy is needed that takes a bottom-up approach and does not rely too heavily on mission-driven research policies. This is the only way to achieve breakthrough innovations that can compete globally with the leading industrialised countries. China’s strongly mission-driven innovation policy cannot serve as a role model in this regard.”

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The US Federal Reserve decided to leave its benchmark rate unchanged in a range between 0.0 and 0.25 per cent, and not yet expand its ongoing asset purchase programme any further. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter:

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The German digital contact-tracing app “Corona-Warn-App” is designed to facilitate and speed up the tracking of SARS-CoV-2 infections. However, the app does not currently meet this objective. “To have its full impact, the app needs to be more widely used and the user guidance needs to be much more geared towards effectiveness. In addition, the app would have to be continuously improved on the basis of a well-defined performance measurement,” says Dr. Dominik Rehse, head of the Junior Research Group “Digital Market Design” at ZEW Mannheim. In a recently published ZEW policy brief, he and a researcher from the University of Mannheim recommend setting up a living lab for the contact-tracing app. The lab should serve to systematically test the measures to promote the app’s dissemination, optimise its use and measure its success in order to significantly improve the app.

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Today, the EU Commission is set to unveil the Digital Services and Digital Markets Acts in Brussels. Professor Achim Wambach, president of ZEW Mannheim and member of the Monopolies Commission, comments on this matter: “The EU Commission’s efforts to establish new rules that take into account the fast-paced dynamics of digital markets and limit the market power of tech giants in advance is the right approach. In the future, it will be important to prevent individual companies in digital markets from becoming uncontrollably powerful in the first place.

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In the December survey (1–9 December 2020), the CEP indicator decreased by 23.7 points to a new reading of 31.3 points. Although this marks a sharp decline, expectations are still at a historically high level. The CEP indicator, based on the China Economic Panel (CEP) 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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