Newsletter April 2022

In spring 2022, the first easing of COVID-19 restrictions was barely in sight before the next crisis followed. With the Russian attack on Ukraine, Germany was once again placed in a state of emergency. “The state is tasked with managing these crises, but must not neglect its long-term responsibilities. With our research, we provide orientation for economic policy action and make fact-based information available to the public. Especially in times of uncertainty, this is more important than ever,” explains ZEW President Professor Achim Wambach. The ZEW Annual Report 2021, which has now been published in German, provides an overview of ZEW’s activities in the past year.

The digital economy poses enormous challenges for policymakers in terms of innovation, competition and regulation. How can digital markets be regulated properly, how can innovations be fostered and competition be made fair at the same time? These and many other questions were discussed by around 190 participants from science, politics and business at this year’s annual conference of the Mannheim Centre for Competition and Innovation (MaCCI) at ZEW Mannheim.

Despite owning real estate, many people worry about their income in retirement. In recent years, numerous financing models, including life annuity, have come onto the market and promise to solve the problem. These new models allow owners to liquidate their home without losing the right to live there. In the 19th episode of the #ZEWPodcast, ZEW economist Dr. Karolin Kirschenmann compares various equity release products and explains who might be interested in them. She also illustrates how policymakers can provide regulation and how the market works in other countries.

As a result of the war in Ukraine and the Western sanctions against Russia, energy and commodity prices are rising. Goods for daily use are becoming more expensive, and oil prices are rising rapidly, as are inflation forecasts. Companies in the chemical and logistics sectors, for example, which are directly affected by the price increases for gas, oil and other raw materials, are adjusting their business models. Labour costs are falling with unexpectedly higher inflation rates and constant nominal wages. This has a temporary stabilising effect.

Also, more people are employed in the defence industry, in energy conservation and alternative energies. However, aggregate demand for goods may decline as people begin to prioritise which goods they need and which they can do without if prices continue to rise.

After the sentiment indicator had recorded an increase for six quarters in a row, the German Real Estate Finance Index (DIFI) by ZEW Mannheim and JLL fell in the first quarter of 2022. Compared to the previous quarter, the index dropped by 3.5 points to 7.2 points.

Can Germany afford to sanction Russia with a ban on energy imports? This discussion between Professor Moritz Schularick of the University of Bonn and Professor Achim Wambach, president of ZEW, originally appeared in the 22 March 2022 issue of the financial daily ‘Handelsblatt’.

The Integration of Migrants and Attitudes Towards the Welfare State (IMES) Junior Research Group, a joint research group of ZEW Mannheim and the Mannheim Centre for European Social Research (MZES) at the University of Mannheim is pleased to announce an international workshop on immigration, integration and attitudes on 22 and 23 September 2022 in Mannheim. The event brings together international scholars from different social sciences (political science, sociology, economics) studying the impact of migration in the host countries.
 
As keynote speakers we are pleased to welcome Marueen Eger (Umeå University, Sweden) and Giovanni Peri (University of California (UC Davis), USA).
 
Recent empirical and policy-oriented contributions on the integration of immigrants and its effect on the welfare state and attitudes formation are welcome. Please submit an extended abstract (max. 1,000 words), or a full paper (preliminary versions are welcome) no later than 31 May 2022 to immigration@zew.de.
 

ZEW Mannheim is pleased to announce the fifth workshop on spatial dimensions of the labour market, jointly organised with the Institute for Employment Research (IAB), on 5 and 6 October 2022 in Nuremberg. This year, a special focus is on aspects revolving around the Covid-19 crisis. The pandemic causes enormous economic and social disruptions which might affect regional labour markets in various ways in the short and long term. Keynote speakers are Christina Gathmann (Luxembourg Institute of Socio-Economic Research (LISER), Esch-sur-Alzette, Luxembourg) and Diego Puga (Center for Monetary and Financial Studies (CEMFI), Madrid, Spain).
 
The workshop aims to bring together frontier research of labour economists, regional economists, sociologists, geographers and scholars from related fields. Theoretical, empirical and policy-oriented contributions are very welcome. Please submit a full draft paper or extended abstract (about 1,200 words) in PDF format to IAB.Spatial-LM@iab.de no later than 15 May 2022.

ZEW Mannheim is pleased to announce the ninth edition of the Annual MannheimTaxation Conference on 8 and 9 September 2022. The two-day conference is planned as a face-to-face event and organised by the Leibniz ScienceCampus MannheimTaxation, a joint initiative of ZEW and the University of Mannheim. This year’s keynote speakers are Rita de la Feria, professor of tax law at the University of Leeds, UK, and Nadine Riedel, professor of public and regional economics, University of Münster.
 
We invite submissions on any topics broadly related to tax research, including papers from economics, accounting, law, political science, and interdisciplinary contributions. The conference focuses particularly on business taxation, tax avoidance and evasion, tax harmonization in the European Union, political economy of taxation, international taxation, and tax law. Please submit full papers or extended abstracts via the conference management system no later than 29 May 2022.

German economic growth has stalled – and is expected to proceed at a sluggish pace in the coming years. According to the financial market experts surveyed by ZEW, lower but stable annual growth rates of between 2.0 and 2.5 per cent are anticipated in 2022 to 2024. Several factors will act as a drag on German GDP, including high energy prices, raw material shortages, and supply chain disruptions – as well as the new geopolitical situation that has arisen with Russia's invasion of Ukraine. The majority of experts have made downward revisions to their GDP growth forecasts for 2022, 2023 and beyond.

With a view to the next five years, individual sectors of the German economy will be affected to varying degrees by geopolitical developments, with the greatest impacts being suffered by vehicle manufacturing, chemicals and pharmaceuticals, steel and non-ferrous metals, and mechanical engineering.

More than 4.6 million Ukrainians have fled the country since the start of the war. As a result of the invasion, more and more people are also fleeing from Russia. Reasons for this range from the restricted freedom of expression, fear of political persecution or being drafted into military service, to poor economic prospects following the unprecedented level of sanctions on Russia. What is different with current Russian migrants fleeing to neighbouring countries compared to Ukrainian migrants, is that there are indications that the economically active population is over-represented among the Russian emigrants.

This may include specialists in the IT and other creative sectors of the economy, who have international language skills as well as customers.

The ZEW Indicator of Economic Sentiment for Germany recorded a decline in the current April 2022 survey, falling 1.7 points to a new reading of minus 41.0 points. The assessment of the economic situation in Germany has again worsened significantly in the current survey. The corresponding indicator dropped 9.4 points to a level of minus 30.8 points. This is the second time the indicator has recorded a decrease since the start of the war in Ukraine. The expectations and assessments of the economic situation are currently similar to those at the beginning of the COVID-19 pandemic in March 2020.

Inflation expectations for Germany have fallen by 43.4 points in the current survey to a new value of 26.8 points.

Failing with a start-up is usually considered as a valuable experience whose insights will help the founders to be more successful in their next start-up. However, this is a false conclusion, as a recent study by ZEW Mannheim and the Institute for SME Research (ifm) at the University of Mannheim shows. On the contrary, there is an above-average probability that those founders will fail again with future start-ups.

Climate change affects firms in Germany in several ways. This triggers not only eco-innovations in firms to mitigate the effects of global warming, but also other innovations, as a recent study by ZEW Mannheim together with the University of Applied Sciences Augsburg shows.

The prices for electricity and heat have risen sharply recently. This puts pressure on low-income households in particular, as they have less financial leeway to deal with the high prices. In many cases, the obvious savings options have already been exhausted. At the same time, worthwhile investments in energy-efficient household appliances, such as a new refrigerator, usually cannot be made without additional financial support. However, support programmes to increase energy efficiency in low-income households should not only focus on purely financial support, but combine the offer with targeted behavioural incentives to achieve the greatest possible success. This is the result of a recent ZEW policy brief by ZEW Mannheim and Heidelberg University, which is based on an empirical analysis of the “Energy-Saving Check”, a joint initiative of the German Caritas Association and the Bundesverband der Energie- und Klimaschutzagenturen.

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 too 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.

Our publications are available to download in PDF format. PDF files can be viewed using, among others, Acrobat Reader, which you can download for free at https://acrobat. adobe. com/us/en/acrobat/pdf-reader. html

Max Deter and Martin Lange
Are the Supporters of Socialism the Losers of Capitalism? Conformism in East Germany and Transition Success

Bernhard Ganglmair, W. Keith Robinson, and Michael Seeligson
The Rise of Process Claims: Evidence From a Century of U.S. Patents

Arthur Seibold, Sebastian Seitz, and Sebastian Siegloch
Privatizing Disability Insurance

Gary Champan and Hanna Hottenrott
Green Start-Ups and the Role of Founder Personality

Jens Horbach and Christian Rammer
Climate Change Affectedness and Innovation in German Firms

Bettina Chlond, Timo Goeschl, and Martin Kesternich
Wie lässt sich die Energieeffizienz in einkommensschwachen Haushalten steigern? (How Can Energy Efficiency Be Increased in Low-Income Households?)

Katia Gallegos Torres and Katrin Sommerfeld
Regionale Verteilung russischer Communities in Deutschland (Regional Distribution of Russian Communities in Germany)

Josefine Diekhof, Jürgen Egeln, and Christian Rammer
Beiträge zum Innovations‐Monitoring für die Metropolregion Rhein‐Neckar (Contributions to Innovation Monitoring for the Rhine-Neckar Metropolitan Region)

Standards and Standardization Processes as a Recursive Transfer Channel for Transdisciplinary Knowledge

Due to the ongoing COVID-19 pandemic, the following event details may be subject to change. The current status of the events can be found in the ZEW Events Calendar. If you have any questions, please don’t hesitate to contact our event team at event@zew.de.

Speaker: Carolyn Deller (The University of Pennsylvania, Philadelphia, USA)
Location of the event: Online

Speaker: Felix Bierbrauer (University of Cologne)
Location of the event: ZEW, Mannheim

Speakers: John Van Reenen (Massachusetts Institute of Technology (MIT), Cambridge, USA) and Danielle Li (Massachusetts Institute of Technology (MIT), Cambridge, USA)
Location of the event: ZEW, Mannheim

Speaker: Bernhard Kasberger (Heinrich Heine University Düsseldorf, Germany)
Location of the event: Online

Speaker: Chris Roth (University of Cologne)
Location of the event: ZEW, Mannheim

Speaker: Gabriele Meyer (Martin Luther University Halle-Wittenberg)
Location of the event: ZEW, Mannheim

Speakers: Lucas Bretschger (ETH Zurich, Switzerland), Arthur van Benthem (The Wharton School, The University of Pennsylvania, Philadelphia, USA), Paul Ferraro (John Hopkins University, Baltimore, USA), and Erica Myers (University of Calgary, Canada)
Location of the event: ZEW, Mannheim

Speaker: Claudio Costanzo (Université libre de Bruxelles (ULB), Belgium)
Location of the event: ZEW, Mannheim

Speaker: Mats Köster (Central European University, Vienna, Austria)
Location of the event: ZEW, Mannheim

Speakers: Eve Caroli (Université Dauphine, Paris, France), Christian Dustmann (University College London, United Kingdom, CReaM, and IAB), Klarita Gërxhani (European University Institute, Florence, Italy), and Albrecht Glitz (Universitat Pompeu Fabra, Barcelona, Spain)
Location of the event: ZEW, Mannheim

Speaker: Adhurim Haxhimusa (University of Applied Sciences of the Grisons, Chur, Switzerland)
Location of the event: Online

Speakers: Norman Thatcher Scharpf (U.S. Consul General) and Professor Achim Wambach, PhD (ZEW)
Location of the event: Online

Tenure-Track Postdoctoral Researcher (f/m/d, 100%) in the Research Group “Health Care Markets and Health Policy”

Doctoral Researcher (f/m/d, 75%) in the Research Department “Environmental and Climate Economics”

Tenure-Track Postdoctoral Researcher (f/m/d, 100%) in the Research Department “Environmental and Climate Economics”

Picture Credits: press release of 13.04.2022: Ольга Рязанцева | stock.adobe.com, press release of 11.04.2022: iStock.com/courtneyk, press release of 05.04.2022: AdobeStock.com/REDPIXEL, press release of 31.03.2022: iStock.com/tumsasedgars, news article of 31.03.2022: JLL und ZEW, news article of 24.03.2022: Moritz Schularick/ZEW
All further pictures: ©ZEW