News

The restrictions on public life imposed by German policymakers are effective measures for containing the coronavirus, but in addition to sanctioning those who breach the rules, instruments should be put in place that reward citizens for responsible behaviour. Mobile devices and systems are particularly well suited for implementing such a system, argues Dr. Dominik Rehse, head of the Junior Research Group “Digital Market Design”.

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Working from home instead of at the office, suffering from existential fears instead of disposing of sufficient liquidity, and experiencing economic decline instead of a boom – the coronavirus pandemic has a direct impact both on the economy and on the population. We at ZEW are closely following these latest developments.

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The German Bundestag and the Bundesrat have approved the biggest rescue programme in the history of the Federal Republic of Germany. With a volume of up to 600 billion euros, the Economic Stabilisation Fund (WSF) aims to intervene in the economy and support German businesses during the difficult times amid the coronavirus pandemic. While the federal government’s swift and determined action is to be welcomed, greater account should be taken of the lessons learned from the financial crisis that began in 2007, argue ZEW President Professor Achim Wambach and Klaus Schmidt, professor at the University of Munich and chair of the Board of Academic Advisors to the Federal Ministry for Economic Affairs and Energy. 

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Facts and fake news, working and welfare, interest rates and savings, start-ups and the green economy, labour markets and refugees – these are just some of the challenges facing our society and economy. We are more in need of innovative ideas than ever before, particularly from the younger generation. The YES! – Young Economic Summit, Germany’s biggest school competition based on social and economic issues, returns for 2020. Five teams of students from schools in Baden-Württemberg, Rhineland-Palatinate, Hesse and Saarland came to ZEW Mannheim for the Southwest region kick-off in the week of 10–19 March 2020.

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Demographic changes are increasingly being felt in Germany as many companies struggle to find qualified applicants. Nevertheless, many unutilized options exist for easing bottlenecks in the German labour market.

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The downward trend of the German Real Estate Financing Index (DIFI) of ZEW and JLL continues in the first quarter of 2020. The index fell 3.7 points to a level of minus 18.9 after the surveyed experts again gave a worse assessment of the financing situation both for the past six months as well as for the coming six months. Only the sub-indicators for stationary retailers show a clear improvement, but still remain in negative territory.

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At the centre of the debate about the possible expansion and restructuring of the EU budget lies the distinction between net contributors and recipients among EU Member States. Even though the concept of net operating balances is by no means suitable for reflecting the added value of the EU as a whole or for its Member States, these annual indicators still receive much political attention. ZEW Mannheim, on behalf of the European Parliament and together with the European Policy Centre, discusses the main points of criticism regarding the net operating balance concept, and possible alternatives for it.

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The Federal Ministry for Economic Affairs and Energy has submitted a draft proposal for the 10th Amendment to the German Competition Act (GWB) – the cornerstone of the social market economy. Otherwise referred to as the ‘GWB Digitalisation Act’, the amendment reflects how digitalisation is dramatically changing the way we do business. But one important step remains. After a long delay, the draft proposal has been published, and opinions from professional associations and the states will soon be heard. This is the second amendment aimed at integrating the special features of the digital economy into competition law. While the 9th amendment to the GWB integrated the terms ‘data’ and ‘platform’ into the GWB, the present draft shows how radically these concepts have altered our economy. 

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How satisfied are citizens with the distribution of power at European level? Can acceptance for the EU increase by making decision-making processes more transparent? These questions were discussed at the ZEW Lunch Debate on “Public Support and Institutional Reform – What Is the Right Way to Go?”, which took place on 20 February 2020 in Brussels at the State Representation of Baden-Württemberg to the European Union. A general consensus was that people wanted to have a say in Europe, including through their national governments.

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Policymakers are increasingly relying on behavioural interventions with the aim of improving individual decisions. These interventions have become known as “nudges” following the similarly titled book written by Richard Thaler and Cass Sunstein in 2008. Nudging methods are used, for example, to increase the willingness of individuals to pay taxes. But how effective are these measures in reality?

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