Newsletter June 2022

Over the past two decades, the European Central Bank (ECB) has taken on a growing number of tasks. From banking supervision to green financing, the thematic scope of the ECB has extended beyond the classical objective of price stability. Is the ECB currently experiencing an excess of tasks, or is this an appropriate response to the economic challenges of our time? ZEW Mannheim organised a full-day workshop on 31 May 2022 with the support of the Strube Stiftung to debate these questions.

German Labour Minister Hubertus Heil’s plan to introduce a social climate income is currently being hotly debated. Against the background of rising energy prices, the new policy instrument is intended to relieve people with low or medium incomes. The climate income was already agreed by the coalition parties last year in order to make the transformation to climate neutrality socially compatible.

In the first episode of the new podcast format ‘Kurz eingeordnet’ / ‘Put into Context’, ZEW redistribution expert Professor Holger Stichnoth gives his economic assessment of the climate income in conversation with host Dominic Egger and points out possible ways for equitable relief.

Dr. Zareh Asatryan, deputy head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, has been appointed to the Economic Policy Council to the Prime Minister of Armenia. The independent council was established in May 2022.

ZEW researcher Jan Kinne started Istari.ai together with David Lenz while doing his doctorate. In the 21st episode of the #ZEWPodcast ‘Wirtschaft · Forschung · Debatten’/‘Economy · Research · Debates’, the economist looks back on the time when the company was founded and explains what added value his company Istari.ai offers for science, politics and companies.

As digitalisation has reached the health sector, medical innovations will be driven more and more by the use of data. Analysing and connecting patient data is playing an increasingly important role in the early detection of epidemics and for developing patient-specific treatment plans. The use of patient data presents opportunities as well as challenges for patients, the public health sector and Germany as a business hub. This raises the question of why Germany is not up to speed on the use of health data. How can the full potential of health data be used and competitiveness be increased?

ZEW President Professor Achim Wambach, Baden-Württemberg Minister of Science Theresia Bauer, and health expert and chairman of the board of AOK Baden-Württemberg Johannes Bauernfeind discussed these questions in a panel debate at BW Bank Stuttgart on 1 June 2022. ZEW Mannheim organised the panel discussion together with the Ministry of Science, Research and the Arts Baden-Württemberg. Anne Guhlich and Joachim Dorfs, editors-in-chief of the Stuttgarter Zeitung, moderated the event.

In Germany, as in many other industrialised countries, occupations with predominantly manual routine tasks are generally on the decline. However, this structural change does not affect all regional labour markets to the same extent. How do regional differences affect employees individually and what role do layoffs and job mobility play in this context?

French President Emmanuel Macron has lost the absolute majority in parliament with his Ensemble coalition. Important reforms thus become bargaining chips. Professor Holger Stichnoth, head of the Research Group “Inequality and Public Policy” at ZEW Mannheim, has commented on this matter.

Investors’ confidence in cryptocurrencies is currently being severely tested. The sell-offs on the markets are huge. In the midst of this financial turmoil, the digital token, TerraUSD, collapsed in mid-May this year. The crash caused a sensation because, in theory, it should not have happened, as TerraUSD is a stablecoin. This means that each unit of this digital currency, which is independent of states, banks or companies, should always be worth exactly one US dollar. The stablecoin losing its peg from the dollar was not an isolated case. Even the market leader among stablecoins, Tether, was temporarily quoted below the target price of one US dollar.

Together, the European Parliament’s Committees on Economic and Monetary Affairs and on Environment, Public Health and Food Safety have objected to the classification of nuclear power and gas as sustainable investments. Dr. Karolin Kirschenmann, deputy head of the Research Department “Pensions and Sustainable Financial Markets” at ZEW Mannheim, has commented on this matter.

The ZEW Indicator of Economic Sentiment for Germany climbed 6.3 points to a current value of minus 28.0 points in the June 2022 survey. The assessment of the economic situation in Germany improved by 8.9 points in the current survey, leaving the corresponding indicator at minus 27.6 points.

Minimum standards can be effective in motivating homeowners to replace gas and oil heating systems. This is the result of a recent study by ZEW Mannheim and the Leibniz Institute of Ecological Urban and Regional Development (IOER) Dresden. “The heat transition is essential for Germany to achieve its climate goals. In view of the war in Ukraine and related sanctions, the heat transition has now become an even more urgent matter than before,” explains Professor Kathrine von Graevenitz, deputy head of ZEW’s “Environmental and Climate Economics” Research Department and co-author of the study.

The ECB will discontinue its net asset purchase programmes at the end of June. A new study by ZEW Mannheim with the support of the Brigitte Strube Stiftung has examined how the bond purchases have been allocated across the various euro countries.

The war in Ukraine poses major challenges for German firms. High energy prices, as well as restricted access to intermediate inputs and products impacts business activities, especially in the manufacturing industry. Larger firms in the information economy and manufacturing industry are preparing for the increasing threat of cyberattacks and have taken precautionary measures. These are the findings of a representative survey by ZEW Mannheim between 17 March and 14 April 2022 among approximately 700 firms in the manufacturing industry and information economy, including the ICT sector, media service providers and knowledge-intensive service providers.

For more than ten years, the Federal Ministry of Education and Research (BMBF) has funded scientific projects in the field of “Economics of Climate Change”, in which economists investigate efficient ways to achieve climate goals. At the final conference of the funding measure on 30 and 31 May in Berlin, ZEW Mannheim underlined its prominent role in the German climate economics research network, with ZEW researchers presenting seven projects and co-organising two breakout sessions, and Professor Martin Kesternich participating in the concluding panel discussion.

When it comes to digitalisation, many firms in Germany have made quite some progress in the course of the COVID-19 pandemic. In March 2022, for example, 54 per cent of firms in the information economy rated the level of digitalisation of their own products and services as high or very high, while this figure was still 38 per cent in September 2020. Meanwhile, in the manufacturing industry, the share of firms with a high or very high level of digitalisation of products and services has risen from 18 per cent in September 2020 to 37 per cent in March 2022.

More than two thirds of German households support the introduction of mandatory insurance against flood damages and other natural hazards. Support has risen slightly following the flood disaster in 2021. This is the result of a representative survey conducted by ZEW Mannheim among around 5,000 households in 2020 and 2022.

Federal Minister of Labour and Social Affairs, Hubertus Heil, has presented his plans for a so-called climate income (‘Klimageld’), a social compensation mechanism to relieve the burden on people with low and medium incomes in the face of high food and energy prices. Professor Holger Stichnoth, deputy head of the Research Department “Inequality and Public Policy” at ZEW Mannheim, has commented on this matter.

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

Carlo Moana Birkholz and Friedrich Heinemann
Magnitudes and Capital Key Divergence of the Eurosystem’s PSPP/PEPP Purchases – Update June 2022

Bettina Chlond, Martin Kesternich, and Timo Goeschl
More Money or Better Procedures? Evidence From an Energy Efficiency Assistance Program

Melanie Arntz, Boris Ivanov, and Laura Pohlan
Regional Structural Change and the Effects of Job Loss

Knut Blind, Bastian Krieger, and Maikel Pellens
The Interplay between Product Innovation, Publishing, Patenting and Developing Standards

Francesco Berlingieri, André Diegmann, and Maresa Sprietsma
Preferred Field of Study and Academic Performance

Jan Abrell, Süheyb Bilici, Markus Blesl, Ulrich Fahl, Felix Kattelmann, Lena Kittel, Mirjam Kosch, Gunnar Luderer, Drin Marmullaku, Michael Pahle, Robert Pietzcker, Renato Rodrigues, and Jonathan Siegle
Optimal Allocation of the EU Carbon Budget: A Multi-Model Assessment

Benjamin Görlach, Michael Jakob, Katharina Umpfenbach, Mirjam Kosch, Michael Pahle, Théo Konc, Nils aus dem Moore, Johannes Brehm, Simon Feindt, Fabian Pause, Jana Nysten, and Jan Abrell
A Fair and Solidarity-based EU Emissions Trading System for Buildings and Road Transport

Daniel Osberghaus
Versicherung von Hochwasserschäden klimasicher und sozial verträglich gestalten (Making Flood Damage Insurance Climate-Proof and Socially Compatible)

Economic Upheaval and Human Capital Formation

Energy Consulting by Peers As a Key to Energy Efficiency Improvements in Low-Income Households

Monitoring of the Participating of Small and Medium-Sized Companies (SMEs) within the Federal Direct R&D Project Funding (DPF) – Classification of Firms

How Forward Looking Does the Federal Government Invest? Development of a Monitoring of the Future Orientation of the Federal Budget

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.

Speakers: Fiona M. Scott Morton (Yale School of Management, New Haven, USA) and Alessandro Acquisti (Carnegie Mellon University, Pittsburgh, USA)
Location of the event: ZEW Mannheim

Speaker: David Slusky (University of Kansas, Lawrence, USA)
Location of the event: ZEW Mannheim

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

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

Picture Credits: press release of 23.06.2022: megaflopo / stock.adobe.com, press release of 09.06.2022: ifw Kiel/M. Stefan, news article of 03.06.2022: Uli Regenscheit, press release of 30.05.2022: Anna Logue Fotografie
All further pictures: ©ZEW