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For the first time, Germany will be governed by a ‘traffic light’ coalition, named after the traditional colours of the parties. Expectations are high, especially with regard to tackling the climate crisis, which resembles a Herculean task. In their coalition agreement, the SPD, the Greens and the FDP show the way towards a transformation that should be at the same time sustainable, socially affordable and cost-efficient – at least that’s what the coalition parties say. In the 16th episode of the #ZEWPodcast ‘Wirtschaft · Forschung · Debatten’/‘Economy · Research · Debates’, ZEW President Professor Achim Wambach spoke about the climate plans set out in the new coalition agreement. Wambach explains, among other things, how the traffic light parties want to secure the energy supply, why there is still potential for conflict in the expansion of wind power, and what the coalition plans to do with Deutsche Bahn.

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Almost the entire German economy has become more digital than it was in 2020, according to the Digitalisation Index 2021, which is calculated on an annual basis as part of the project “Measuring the degree of digitalisation in the German economy”. The project is conducted by a consortium formed by ZEW Mannheim (consortium leader), the Cologne-based German Economic Institute (IW), IW Consult, the Institute for Industrial Management FIR at RWTH Aachen University, and the German Institute for Economic Research (DIW) on behalf of the Federal Ministry for Economic Affairs and Energy.

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The agreement recently presented by Germany’s new three-way coalition government of Social Democrats, Greens and liberals puts climate policy at the top of the agenda. However, what this transformation will essentially look like is being negotiated in Brussels as part of the “Fit for 55” programme and not in Berlin. The measures agreed in Brussels will have a direct impact on climate policy in Germany.

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Christina Meyer, a researcher in the ZEW Research Department “International Finance and Financial Management”, received the Gerhard Fürst Award of the Federal Statistical Office (Destatis) on 18 November 2021. The award aims to promote young researchers. She was honoured in the category master’s/bachelor’s theses for her master’s thesis on gender-specific differences in old-age provision after the introduction of so-called unisex tariffs in the Riester pension scheme.

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The German business magazine Capital counts ZEW economist Professor Vitali Gretschko among the “top 40 under 40” talents from science and society. For Capital, the head of the Research Department “Market Design” at ZEW Mannheim is one of the most important talents from business, politics, science and society who are shaping developments in Germany.

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How can we ensure all players in economy, including multinationals, contribute to society in a fair way? How should taxation be handled in individual countries against the backdrop of international value chains and global markets? At this year’s MannheimTaxation Annual Conference many topics presented by ZEW Mannheim addressed the currently hotly debated new regulations in international corporate taxation.

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After Angela Merkel’s 16-year term as chancellor, Germany is doing very well economically, at least if we look at GDP or the unemployment rate. However, this is only half the truth. The need for re-form is enormous. The Economist even wrote about “The mess Merkel leaves behind” and de-nounced the complacency of German politics. Climate change and digitalisation are leading to mas-sive upheavals for which Germany is not sufficiently prepared. The coming government has a lot to do in this regard. With a new composition of political forces, however, it has a unique opportunity to resolve frictions and revitalise markets to make space for innovation and enable the adjustments necessary for change. Let me give you three examples:

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China aims to become the world’s leading nation in innovation and technology by 2050. Research and development (R&D) are crucial for achieving this goal. Therefore, the government grants Chinese companies extensive subsidies for their R&D activities. However, these funds are not always used for the intended research purposes. In the latest episode of  the #ZEWPodcast ‘Wirtschaft · Forschung · Debatten’/‘Economy · Research · Debates’, Professor Bettina Peters, deputy head of the ZEW Research Department “Economics of Innovation and Industrial Dynamics” and Dr. Philipp Boeing, ZEW innovation economist and China expert, talk about the misappropriation of R&D subsidies in China.

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What role do economic research institutes play in addressing economic policy challenges in Germany and Europe? This question was the topic of the panel discussion on 8 November 2021 on the occasion of the 30th anniversary of ZEW Mannheim. ZEW President Professor Achim Wambach was joined in the discussion by Dr. Guntram Wolff, director of Bruegel in Brussels, and PD Dr. Monika Köppl-Turyna, director of EcoAustria in Vienna. The panel was moderated by Silke Wettach from the news magazine “Wirtschaftswoche”.

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Economic experts expect the economic recovery to be postponed until 2022. However, not only is economic growth in Germany expected to pick up in 2022, the forecasts for the inflation rate in Germany and the euro area are also being revised up slightly. This is the result of the business cycle tableaus by ZEW Mannheim and the German daily newspaper, Börsen-Zeitung.

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