Newsletter May 2017

The majority of French voters rejected Marine Le Pen, the right-wing presidential candidate from the populist party Front National. Emmanuel Macron, the former economy minister under President François Hollande, carried the election with 66.1 per cent of the votes.

There's a revolution brewing on Germany’s roads: In the not too distant future, cars could be controlled exclusively by computers. Today there are already a number of vehicles on Germany's roads which are able to steer themselves independently, at least to some degree. The US company Google also recently presented its own self-driving car. ZEW environmental economist Dr. Wolfgang Habla offers his thoughts on the potential arising from autonomous driving as well as its possible environmental and social consequences.

On 11 and 12 May 2017, the Centre for European Economic Research (ZEW) organised the sixth Mannheim Energy Conference in collaboration with the Mannheim Centre for Competition and Innovation (MaCCI). Over the course of two days, around 60 national and international participants discussed various topics in the fields of energy economics. At this year’s conference, special emphasis was placed on energy efficiency, energy innovation as well as electricity market design.

On 8 and 9 May 2017, the Centre for European Economic Research (ZEW) organised the annual ZEW Public Finance Conference in cooperation with the “Arbeitskreis Europäische Integration” (AEI). Over the course of the conference, around 100 participants were offered a varied programme which featured numerous presentation on recent research findings from all areas of public economics and political economy. During this year's conference, special emphasis was placed on empirical research at the intersection of public finance and development.

ZEW environmental economists presented research findings from current projects at the annual UN Climate Change Conference in Bonn, an event which sets the course for the 23rd Climate Change Conference (COP23) at the end of the year. In the run-up to COP23, which will also take place in Bonn in late 2017, ZEW organised an event in cooperation with the Institute for Transportation and Development Policy (ITDP), entitled “Strengthening Leadership on Low-Carbon Transport to Deliver Long-Term Climate Goals”, on 16 May 2017. The event took as its main focus the significance of the transport sector in the pursuit of meeting global climate targets.

In the presidential election in France, the French people voted for former Economy Minister Emmanuel Macron. Professor Achim Wambach, President of the Centre for European Economic Research (ZEW) in Mannheim, comments: “Emmanuel Macron clearly positioned himself as a pro-EU candidate and as such his election as the new French President comes as a relief also for Germany.”
 

On 30 and 31 March 2017, the Institute for Employment (IAB), the Rimini Centre for Economic Analysis (RCEA), and the Centre for European Economic Research (ZEW) held a third joint workshop on the spatial dimensions of the labour market at ZEW in Mannheim. About 45 participants from around the world presented research exploring the issue of spatial inequality – the focus of this year’s conference – from various perspectives. The workshop was organised as part of the international research programme “Strengthening Efficiency and Competitiveness in the European Knowledge Economies” (SEEK).

It would be fair to say that the European Union and its institutions do not currently enjoy a reputation for making and implementing decisions quickly. When it came to the decision to create a European Fiscal Board (EFB) back in October 2015, however, the European Commission was relatively quick off the mark, with the EFB coming into operation just one year later. The responsibilities of this new advisory board include monitoring the implementation of the Fiscal Compact, working closely with the individual national fiscal boards and briefing the European Commission on the current state and future development of fiscal policy.

But is the EFB carrying out its duties as independently as initially intended? Has the board proved itself effective in the first few months following its founding, or is it just yet another cog in the bureaucratic machine in Brussels? How significant a role should and indeed must the EFB assume in the future? These were the main questions up for discussion at the ZEW lunch debate on 27 April 2017 at the Representation of the State of Baden-Württemberg to the EU in Brussels.

As the process of digitalisation advances at a rapid rate all over the world, how attractive a location is for investments in digital business models depends on the tax framework of the country in question. While other indices assessing a country’s digital attractiveness neglect taxes as a location factor, the study “Digital Tax Index 2017: Locational Tax Attractiveness for Digital Business Models” carried out by the Mannheim Centre for European Economic Research (ZEW) in cooperation with the University of Mannheim and the accountancy and consulting firm PricewaterhouseCoopers (PwC) now delivers a measure to assess the tax attractiveness of countries for investing in digital business models. In an international comparison, Germany has a lot of catching up to do in this arena. This is the main finding of the recent study of the tax frameworks of 33 different countries.

The Mannheim Centre for European Economic Research (ZEW) hosts the fourth international annual MaTax Conference on taxation research on 21 and 22 September 2017. The conference is organised by the Leibniz ScienceCampus MannheimTaxation (MaTax), a joint initiative of the University of Mannheim and the Centre for European Economic Research (ZEW). We invite submissions on all topics broadly related to tax research, including papers from the fields of economics, law, political science, and other disciplines as well as interdisciplinary contributions. The conference focuses particularly on applied and empirical aspects of taxation. Please send your paper or extended abstract to MaTax@zew.de no later than 15 June 2017.

The Centre for European Economic Research (ZEW) is pleased to announce the ninth interdisciplinary conference of the Leibniz Network on Real Estate Markets and Capital Markets (ReCapNet) in Mannheim on 2 and 3 November 2017. The conference is open to all researchers interested in the relationships between real estate markets and capital markets. We welcome contributions from the perspectives of real estate finance and economics, concentrating on issues related to behavioural real estate. More potential topics are listed in the call for papers. Submissions on these topics or other aspects of real estate markets and capital markets are encouraged. Please submit full papers in PDF format to conference@recapnet.org no later than 16 July 2017.

Professor Vitali Gretschko, head of the “Market Design” Research Group at the Mannheim Centre for European Economic Research (ZEW), has taken up a professorship in economics at the University of Mannheim as of 1 April 2017. The professorship runs parallel to his duties as head of the ZEW Research Group “Market Design”, which he has led since June of last year.

The eurozone’s economic prospects over the coming six months improved considerably in May 2017. However, an end to the European Central Bank's (ECB) expansive monetary policy is still not in sight. In the view of the majority of the 350 financial market experts surveyed regularly by the Mannheim Centre for European Economic Research (ZEW) on this issue, the ECB will not reach its inflation target of two per cent for at least the next two years. Only a small fraction of those surveyed thought the ECB was likely to succeed in meeting its target.

According to the current survey for May (2–17 May 2017), the economic outlook for China has declined significantly, falling by 17.8 points (April 2017: 17.7 points). The rather optimistic sentiment witnessed in the previous survey has thus faded somewhat. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is currently at minus 0.1 points, falling below the long-term average of 5.2 points. The assessment of the current economic situation has also dampened and fell by 5.4 points to a current level of 12.2 points.

The ZEW Indicator of Economic Sentiment for Germany continued to increase in May 2017. Compared to the previous month, it climbed by 1.1 points to a current reading of 20.6 points. The long-term average of 23.9 points has not quite been reached yet. The assessment of the current economic situation in Germany also improved once again in May. The indicator climbed by 3.8 points to 83.9 points. Taken together, the assessment of the current situation and the economic sentiment show a positive outlook for the German economic growth in the coming six months. “The latest figures on the gross domestic product confirm that the German economy is in good shape.

ZEW indicators have been pointing to this trend for some time. The prospects for the eurozone as a whole are gradually improving, further strengthening the economic environment for German exports,” comments ZEW President Professor Achim Wambach.

The Working Party on “Tax Revenue Estimates” at the German Federal Ministry of Finance has made considerable upward revisions to their estimates of German tax revenues until 2021. According to the Working Party's estimates, annual tax revenues on the federal, state and municipal level are expected to increase from 732 billion euros in 2017 to 852 billion euros in 2021. Compared with previous forecasts, there has been an upward correction of 46 billion euros regarding tax revenues for the period of 2018–2021. This being the case, tax revenues on the municipal and state level are likely to experience stronger growth than federal revenues. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at the Centre for European Economic Research (ZEW), offers his view on the matter.

In the first quarter of 2017 the majority of firms in the information economy are in an optimistic economic mood. This is according to the ZEW sentiment indicator, which currently stands at 66.8 points. This assessment of the economic situation is just as positive as in the fourth quarter of 2016. Economic sentiment is currently at the highest it has been among knowledge-intensive service providers for many years. This is the result of a survey among firms in the German information economy, conducted by the Mannheim Centre for European Economic Research (ZEW) in March 2017.

Although a tertiary degree is often considered a crucial step towards a successful professional career, many highly qualified young professionals in Germany have been unable to find employment which is appropriate to their level of education. A study by the Centre for European Economic Research (ZEW) in Mannheim shows that even after ten years of labour market experience, one out of seven university graduates in Germany is overqualified, i.e. they hold a position which is below their qualification level. The risk of overqualification varies, however, depending on the field of study, academic achievement as well as labour market success.

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

Bethlehem A. Argaw; Michael F. Maier; Olga J. Skriabikova
Risk Attitudes, Job Mobility and Subsequent Wage Growth During the Early Career

Jesper Riedler; Frank Brückbauer
Evaluating Regulation Within an Artificial Financial System – A Framework and Its Application to the Liquidity Coverage Ratio Regulation

Annette Bergemann; Laura Pohlan; Arne Uhlendorff
Job Creation Schemes in Turbulent Times

Christoph Spengel, Frank Schmidt, Jost Henrich Heckemeyer, Katharina Nicolay, Alexandra Bartholmeß, Rainer Bräutigam, Julia Braun, Verena Dutt, Maria Theresia Evers, Christoph Harendt, Oliver Klar, Hannah Nusser, Marcel Olbert, Olena Pfeiffer, Daniela Steinbrenner, Frank Streif and Maximilian Todtenhaupt
Effective Tax Levels Using the Devereux/Griffith Methodology: Final Report 2016

Monika Gonser, Birgit Jesske and Friedhelm Pfeiffer
Werkstattbericht „Reallabor-Befragungen von Geflüchteten in der Rhein-Neckar-Region“ (Workshop Report „Real-World Laboratory Survey Among Refugees in the Rhine-Neckar Region“)

Analyses of Costs and Returns from Major Changes and Dropout from University

Development of an Instrument for an Impact Analysis of Legislation on Firms' Miscellaneous Costs – An Empirical Analysis by Means of a Firm Survey

Firm Dynamics in the Knowledge Economy – Indicator Study - 2018

Impact of Country-by-Country Reporting on Banks' Profit Shifting Behaviour and Firm Value

Innovation Indicators for the Chemical Industry 2017

Administrative Border Changes and Economic Growth: Global Evidence

Speaker: Prof. Eytan Sheshinski, PhD (Hebrew University of Jerusalem)
Location of the event: ZEW, Mannheim

Speaker: Lea Steinrücke (ZEW)
Location of the event: ZEW, Mannheim

Location of the event: Cala Liberotto/Orosei (Sardinia), Italy

Speaker: Prof. Dr. Erik Hornung (University of Bayreuth)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Frederik Eidam (ZEW)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Dr. Martin Pollrich (University of Bonn)
Location of the event: ZEW, Mannheim

Speaker: Dr. Davud Rostam-Afschar (University of Hohenheim)
Location of the event: ZEW, Mannheim

Speaker: Prof. Dr. Matthias Sutter (University of Cologne)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Picture Credits: Press Article of 26 May 2017: iStock.com/instamatics, News Article of 18 May 2017: IISD/ENB | Angeles Estrada, News Article of 7 May 2017: iStock.com/Agnieszka Gaul, News Article of 28 April 2017: © FKPH, Press Release of 18 April 2017: iStock.com/kasto80
 
All further pictures: ©ZEW