Newsletter October 2016

With the aim of supporting up-and-coming researchers in the region, the Volksbank Weinheim Foundation (Volksbank Weinheim Stiftung) and the Centre for European Economic Research (ZEW) are offering two research awards. The prizes will be awarded to the best dissertation (EUR 3,000) and the best master's thesis (EUR 2,000) on the topic "The Future World of Work". The recipients will have the opportunity to complete a research stay at ZEW.

The Centre for European Economic Research (ZEW) organised the first international ZEW Workshop on Assimilation and Integration of Immigrants in Mannheim on October 13-14, 2016. Around 25 national and international researchers attended the workshop and discussed new developments in migration research.

The euro crisis has reignited the debate about deeper fiscal integration in the European Economic and Monetary Union (EMU). In this context, the idea of a common unemployment insurance system (EMU-UI) is the subject of controversial discussion. Such an automatic stabiliser could help euro countries to absorb asymmetric economic shocks in the euro area. In what way, however, is the implementation of a common unemployment benefit scheme feasible for euro countries? And what pre-conditions need to be met in order to avoid permanent transfers across Member States and moral hazard?

These were some of the questions discussed at the Lunch Debate "Chances and Risks of a European Benefit Scheme", organised by the Centre for European Economic Research (ZEW) at the Representation of the State of Baden-Württemberg to the European Union in Brussels on 20 October 2016.

In the year of the institute's 25th anniversary, the Mannheim Centre for European Economic Research (ZEW) purchased its own building in Mannheim. On October 5, 2016, ZEW President Professor Achim Wambach and Thomas Kohl, Director of Business and Administration, officially signed the purchase agreement.

For the third time, the Leibniz ScienceCampus "Mannheim Taxation" (MaTax), the Centre for European Economic Research (ZEW) and the University of Mannheim jointly organised the Annual MaTax Conference on taxation research, which took place on October 4 and 5, 2016. This year's conference featured a number of topics related to the ScienceCampus' key issue, the design of a sustainable tax system. During the conference, around 80 international researchers discussed current taxation issues, including the influence of taxes on investment decisions, the design of taxes on consumption, the impact of taxes on mobility as well as the effects of EU reform concepts.

Since 2009, Europe has been suffering from the euro crisis and its aftermath. Currently, there seems to be no political solution in sight. In order to tackle this issue and find a way out of the crisis, Professor Markus K. Brunnermeier from Princeton University proposes to introduce so-called European Safe Bonds (ESBies). In his speech, which he delivered as part of the lecture series "First-Hand Information on Economic Policy" at the Centre for European Economic Research (ZEW) on October 4, 2016, Markus K. Brunnmeier outlined his approach to saving the eurozone from the crisis that has gripped Europe since 2009.

The German Real Estate Finance Index (DIFI) has decreased by 1.6 points in the third quarter of 2016 to a current reading of 6.7 points. After coming to a halt, the index continues the downward trend that has started in the fist quarter of 2015, although at a slower pace than in the previous months. The decrease is attributable exclusively to a less favourable assessment regarding the financing situation of real estate. This particularly holds for the financing conditions for residential properties. On average, the corresponding balance of positive and negative assessments regarding the financing conditions for all types of properties has fallen by 10.2 points. Despite this, the balance remains clearly in the positive, with 15.3 points. These are the key findings of the DIFI Report, a quarterly survey on the real estate financing market in Germany carried out by ZEW in cooperation with JLL.

The decision of the British voters to leave the European Union has sparked concerns across the continent. How should and can the process of European integration continue? And what will Germany and France, the two leading economies in Europe besides the UK, do? These are key issues regarding the future of the EU addressed at the ZEW Lunch Debate on September 28, 2016 at the Representation of the State of Baden-Württemberg in Brussels.

The Mannheim Centre for Competition and Innovation (MaCCI), a joint initiative of the Centre for European Economic Research (ZEW) and the University of Mannheim, is pleased to announce its 2017 annual conference in Mannheim on March 16-17, 2017. The conference provides a platform for competition- and innovation-related research and discussion. We invite submissions from all fields of competition law and economics. Theoretical and empirical papers as well as case studies are welcome. We especially invite papers from lawyers with a focus on EU competition law and/or comparative competition law. Please submit full papers as well as extended abstracts in PDF format to macciannual2017@zew.de no later than December 21, 2016.

The Centre for European Economic Research (ZEW), the German Institute for Economic Research (DIW), the Humboldt University Berlin, and the Institute for the Study of Labor (IZA) are pleased to announce a conference on the role of the firm in the labor market in Berlin on March 31 and April 1, 2017. The conference is part of the DFG Priority Program, “The German Labor Market in a Globalized World – Challenges through Trade, Technology, and Demographics” (SPP 1764), and focuses on aspects of firm-level decisions and firm-level developments as well as their impact on labor market outcomes in industrialized countries. We invite empirical and theoretical contributions on this topic from all areas of economics, management research, and sociology. Interested researchers are invited to send submissions in PDF format via e-mail to Arne Jonas Warnke (dfg1764@zew.de) no later than December 4, 2016.

Dr. Zareh Asatryan, researcher at ZEW’s Research Department "Corporate Taxation and Public Finance", was awarded the Friedrich August von Hayek Award for his doctoral thesis by the University of Freiburg. The award honours outstanding doctoral and master's theses at the Faculty of Economics of the University of Freiburg. In his doctoral thesis, ZEW Economist Asatryan analysed the influence of direct democracy on local public finances in Germany.

Around 20 international students from the University of Mannheim visited the Centre for European Economic Research (ZEW) on October 11, 2016. The students visited ZEW in the context of the pilot project "Step by Step" by the International Office of the University of Mannheim. The project is funded by the German Academic Exchange Service (DAAD).

Dr. Marco de Pinto was a visiting researcher in ZEW’s Research Department "Labour Markets, Human Resources and Social Policy" from September 26 to 30, 2016. He works as a research assistant at the Institute for Labour Law and Industrial Relations in the European Union (IAAEU) and in the department of Personnel Economics at the University of Trier. His research focuses on labour market economy, personnel and education economics, as well as international trade. During his visit, he worked with ZEW researchers on a joint research project that investigates the consequences of international trade for workers’ careers in local labour markets.

In the past few years the IT sector saw a significant decline in global mergers and acquisitions (M&A). This trend is particularly pronounced in the USA, the most important market for both IT giants and Internet start-ups. This is the result of recent calculations by the Centre for European Economic Research (ZEW) based on the Zephyr database of Bureau van Dijk.

While from a legal perspective, the US population does have several ways to get involved in politics, the opportunity to exercise these rights mostly depends on factors which are beyond individual control. Individuals which are less privileged in terms of family background and childhood experiences are practically excluded from certain forms of political participation, particularly when it comes to membership in political organisations, participation in rallies and marches, and the direct contact to officials. This is the result of a recent study carried out by the Centre for European Economic Research (ZEW), which for the first time analysed the equality of opportunity in political participation in the USA.

In the third quarter of 2016, the economic sentiment among companies in the German information economy remains positive. The corresponding ZEW Economic Sentiment Indicator, which had already closed at a high level in the previous quarter, continued its growth by climbing an extra 3.4 points, reaching a total of 68.9 points. This suggests that a vast majority of the companies evaluates the economic situation of the information economy positively. This is the result of a survey among companies in the German information economy, conducted by the Centre for European Economic Research (ZEW) in September 2016.

German managers in China are more optimistic again regarding the current economic situation in the world's second largest economy. Following negative evaluations in four consecutive quarters, China's economic situation is for the first time judged more positively again. According to the surveyed managers, the likelihood of an economic slowdown to occur within the coming twelve months remains relatively high. With 33 per cent, however, it is significantly lower than in the previous survey (53 per cent).

The German Internet economy generated a turnover of more than EUR 111 billion in 2015, which corresponds to a 9 per cent increase compared to the previous year. On a global scale, Germany's Internet economy ranks fifth in terms of turnover per capita, remaining in the midrange alongside with Japan and France. In 2015, EUR 1,379 per capita was invested in Internet-based goods and services in Germany. The highest turnover per capita was recorded in the UK (EUR 2,585), followed by South Korea (EUR 2,389) and the USA (EUR 2,352).

These are the findings of the Monitoring Report DIGITAL Economy 2016, conducted by the Mannheim Centre for European Economic Research (ZEW) in collaboration with TNS Infratest, on behalf of the Federal Ministry for Economic Affairs and Energy.

A vast majority of the members of the German state parliaments is optimistic that the German government will be able to meet the requirements of the debt brake, which entered into force this year. In addition, a great number of parliamentarians is confident that their home states will remain within the debt limits, which will be binding for all federal states as of 2020. When it comes to their predictions regarding the ability of other German states to reach a balanced budget, however, the MPs are not quite so optimistic. According to their estimations, only Bavaria, Baden-Württemberg, Saxony and Hesse will be able to meet the requirements.

These are the findings of a survey among members of all 16 German state parliaments conducted by the Mannheim Centre for European Economic Research (ZEW), in collaboration with the University of Mannheim in 2015–16. Compared with the results from a first, similar survey carried out in 2011–12, this year’s results indicate a significant increase in optimism regarding the central level's ability to remain within the debt limit but, surprisingly, not with respect to the states.

The German government and the state parliaments have adopted a resolution which foresees a revision of the Federal Financial Equalisation System. The new legislative framework will see the end of the "horizontal" model, which consists in redistributing tax revenues from financially strong states to financially weak states. Instead, the financial strength of the states will be largely offset at an earlier stage, namely by an initial distribution of value-added tax (VAT) revenues among the federal states. Professor Friedrich Heinemann, head of the ZEW Research Department "Corporate Taxation and Public Finance" at the Centre for European Economic Research (ZEW), takes a critical stance on the reform.

The ZEW-CS Indicator for the economic sentiment in Switzerland has continued its rise in October 2016. Growing by 2.5 points, the index now stands at 5.2 points. The indicator thus continues the slight upward trend already seen in the previous month. The indicator for the current economic situation also recorded an increase, rising by 9.9 points to a current reading of 17.9 points. The ZEW-CS Indicator reflects the expectations of the surveyed financial market experts regarding the economic development in Switzerland on a six-month time horizon.

It is calculated monthly by the Mannheim Centre for European Economic Research (ZEW) in cooperation with Credit Suisse (CS), Zurich.

The ZEW Indicator of Economic Sentiment for Germany increased in October 2016. The index gained 5.7 points compared to the previous month, now standing at a level of 6.2 points (long-term average: 24.1 points). "The improved economic sentiment is a sign of a relatively robust economic activity in Germany. However, positive impulses from industry and exports should not distract from existing political and economic risks. In particular, the risks concerning the German banking sector are currently a burden to the economic outlook," comments ZEW President Professor Achim Wambach.

The assessment of the current situation in Germany has also increased. Gaining 4.4 points, the index now stands at 59.5 points.

Expectations for the Chinese economy have again worsened in the current survey period (12/09/2016 – 28/09/2016). The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has slightly fallen by 2.2 points to a current negative reading of minus 4.1 points. The CEP Indicator therefore currently lies significantly below the long-term average of 5.5 points for the second consecutive time, seen in the period from mid-2013 to September 2016.

The information letters sent out annually by the German pension authority (Deutsche Rentenversicherung) encourage contributors to the statutory pension insurance fund to invest more money in private pension schemes. Whilst these letters result in an increase in labour supply, they simultaneously have a negative effect on charitable donations. This is the finding of a recent study conducted by the Centre for European Economic Research (ZEW) in Mannheim.

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Chances and Risks of a European Unemployment Benefit Scheme

Sven Heim
Rockets and Feathers: Asymmetric Pricing and Consumer Search – Evidence from Electricity Retailing

Paul Hufe; Andreas Peichl
Beyond Equal Rights: Equality of Opportunity in Political Participation

Benjamin Johannes Lutz
Emissions Trading and Productivity: Firm-Level Evidence from German Manufacturing

Matthias Hunold; Ulrich Laitenberger; Frank Schlütter
Evaluation of Best Price Clauses in Hotel Booking

Zareh Asatryan; Andreas Peichl
Responses of Firms to Tax, Administrative and Accounting Rules: Evidence from Armenia

Wolfgang Briglauer; Niklas Dürr; Oliver Falck; Kai Hüschelrath
Does State Aid for Broadband Deployment in Rural Areas Close the Digital and Economic Divide?

Michael Hellwig; Kai Hüschelrath
Cartel Cases and the Cartel Enforcement Process in the European Union 2001 – 2015: A Quantitative Assessment

Zareh Asatryan, Friedrich Heinemann, Mustafa Yeter, Eulalia Rubio, David Rinaldi, and Fabian Zuleeg (2016)
Public Sector Reform: How the EU Budget Is Used to Encourage It

Einhaltung der Schuldenbremse und Bewertung von Länderfusionen – Ergebnisse einer Umfrage in allen 16 Landesparlamenten
(Compliance with the Debt Brake and Assessment of Proposed Federal State Mergers – Results of a Survey Among Members of All 16 German State Parliaments)

Martin Peitz; Heike Schweitzer
Suchmaschinen unter der Lupe: Informationsherrschaft und ihre Schranken (Search Engines Under Scrutiny: The Power of Information and Its Boundaries)

Irene Bertschek, Wolfgang Briglauer, Kai Hüschelrath, Jan Krämer, Stefan Frübing, Reinhold Kesler, and Marianne Saam (2016)
Metastudie zum Fachdialog Ordnungsrahmen für die Digitale Wirtschaft (Meta Study on the Expert Dialogue "Regulatory Framework for the Digital Economy")

Sabine Graumann, Irene Bertschek, Tobias Weber, Martin Ebert, Karola Ettner, Anselm Speich, Michael Weinzierl, Jörg Ohnemus, Thomas Niebel, Christian Rammer, Fabienne Rasel, and Patrick Schulte (2016)
Monitoring-Report Wirtschaft DIGITAL 2016 (2016 Monitoring Report: DIGITAL Economy)

Drivers of Renewable Energy Investments in Space Heating

How do Savers and Banks in Germany React to the Low Interest Rate Environment?

Labour Supply Modelling Using the EUROMOD Microsimulation Model

Leading Economic Indexes for China

Restructuring and Extension of a Sample of the 2016 KfW Business Survey Panel

Speaker: Dr. Oliver Lerbs (ZEW)
Location of the event: ZEW, Mannheim

Speaker: Prof. Michael Waterson (ZEW)
Location of the event: ZEW, Mannheim

Speaker: Prof. David A. Jaeger (City University of New York)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

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

Location of the event: ZEW, Mannheim

Speaker: Jesper Riedler (ZEW)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Speaker: Prof. Dr. Christoph M. Schmidt (Chairman of the German Council of Economic Experts and President of RWI – Leibniz Institute for Economic Research)
Veranstaltungsort: ZEW, Mannheim

Researcher (100%) for the Research Department "Environmental and Resource Economics, Environmental Management"

Researcher (Postdoc) with focus on matching markets for the Research Group "Market Design"

Picture Credits: News Article of October 27, 2016: ©06-2016 Volksbank Weinheim Stiftung / ZEW, News Article of October 21, 2016: ©FKPH, News Article of September 29, 2016: ©Eric Berghen, Press Release of October 27, 2016: ©iStock.com/maxsattana, Press Release of October 26, 2016: ©iStock.com/3dfoto, Press Release of October 20, 2016: ©iStock.com/Jag_cz, Press Release of October 17, 2016: ©iStock.com/ansonsaw, Press Release of October 17, 2016: ©iStock.com/Savushkin, Press Release of October 12, 2016: ©iStock.com/George Clerk, Press Release of September 20, 2016: ©iStock.com/Catherine Lane
All further pictures: ©ZEW