Newsletter August 2021

How well informed are Germans about economic policy issues? And when it comes to understanding reform projects in politics: What role do economic literacy and disinformation play? How important is the transfer of knowledge? These and other questions were discussed by researchers at a workshop organised by ZEW Mannheim in cooperation with the Brigitte Strube Stiftung on 8 July 2021.

Family leaves, part-time work, poorly paid jobs – the causes for the different income levels between women and men are many. In Germany, women currently earn on average 19 per cent less than men. ZEW researcher Susanne Steffes talks in this interview about gender quotas, including current challenges and associated employee perspectives.

In 2021, the Volksbank Weinheim Stiftung and ZEW Mannheim will present the “Future of the Working World” research award for the ninth time. The award aims to honour outstanding doctoral and master’s theses in economics completed at universities and non-university research institutions in the Rhine-Neckar metropolitan region. The award for the best dissertation is endowed with 3,000 euros. The best master’s thesis is rewarded with 2,000 euros. The award also includes the opportunity for a research stay at ZEW. The deadline for submissions is 31 October 2021.

The forecasts of the economic experts for economic growth in the euro area were slightly increased; according to the forecasts, the German economy would perform significantly better than the average of the euro area during the coronavirus crisis. It will be intersting to see the further development of the inflation rate. This is the result of the business cycle tableaus by ZEW Mannheim and the German daily newspaper, Börsen-Zeitung.

The devastating flood disaster, which claimed the lives of more than 180 people and caused billions of euros in economic damage, has brought to light a considerable lack of insurance protection against natural hazards. How can we establish nationwide insurance coverage against floods in Germany?

Bizarre and weird, but fascinating. These are the words Michael Keen uses to describe the history of taxation, which he wrote down in cooperation with Professor Joel Slemrod in their book “Rebellion, Rascals, and Revenue: Tax Follies and Wisdom Through the Ages”. On 27 July, ZEW President Professor Achim Wambach welcomed the two authors Keen, deputy director of the Fiscal Affairs Department of the International Monetary Fund (IMF), and Slemrod, professor of business economics and public policy at the University of Michigan, to the virtual #ZEWBookTalk. In addition, they addressed current developments.

The school team of the Albert-Einstein-Gymnasium from Frankenthal has secured its place in the national final of the school competition YES! – Young Economic Summit in September 2021. The team convinced the organisers with their idea and received the wildcard for the best scientific approach. Katia Gallegos Torres and Paul Berbée from the ZEW Research Department “Labour Markets and Human Resources” are mentoring and supporting the school team in the competition.

Dr. Barbara Stage has been appointed assistant professor of financial accounting and business taxation at WHU – Otto Beisheim School of Management as of 1 August 2021. Previously, she was a researcher in the “Corporate Taxation and Public Finance” Research Department at ZEW Mannheim and completed her PhD under the supervision of Professor Christoph Spengel at the University of Mannheim.

Emerging European countries are less able to participate in global trade since correspondent banks are on the decline. The reason for this decline is that US authorities have tightened financial crime enforcement regulations. The lack of banks offering trade finance services and handling international transactions between exporters and importers makes trade with and for these countries much more difficult. This is shown in a recent study by ZEW Mannheim based on data from 17 Eastern European emerging markets, the so-called Emerging Europe.

The pandemic has only slightly slowed down the start-up activity in Germany in 2020. According to a joint study by Creditreform and ZEW Mannheim, almost 165,000 new companies were founded last year. However, the development varied greatly depending on the sector. Regardless of the COVID-19 crisis, the number of companies grew slightly last year to nearly 3.3 million. Once again, more companies were founded than closed. The Mannheim Enterprise Panel (MEP), conducted by ZEW, recorded around 156,000 firm closures, for example due to withdrawal from business or insolvency.

Today, the German government’s Economic Stabilisation Fund (ESF) announced its intention to sell part of the shares it holds in Lufthansa. Professor Achim Wambach, president of ZEW Mannheim and member of the Monopolies Commission, has commented on this.

With the oil crisis, the bursting of the dot-com bubble, the financial and banking crisis, and the COVID-19 pandemic, the past fifty years have seen several economic shocks that often had severe consequences for the business landscape. Governments are often only able to provide targeted support and respond appropriately to such unexpected events with a significant time lag, as appropriate data is usually not available at the beginning of a crisis. AI-based analysis of corporate websites can remedy this situation by complementing traditional survey methods and providing reliable early forecasts in a timely manner.

This is shown by studies conducted by ZEW Mannheim in cooperation with Justus Liebig University Giessen during the coronavirus crisis.

Financial experts are divided over the new strategy of the European Central Bank (ECB). While 49 per cent of those surveyed by ZEW Mannheim say that the change in strategy has prompted them to adjust their medium-term inflation forecast for the years 2021 to 2023 upwards, another 46 per cent say that the new strategy has no influence on their forecast. Five per cent are even inclined to revise their inflation forecast downwards.

A large number of ZEW survey participants took the opportunity to voluntarily donate part of their expense allowance to the city of Mannheim for urban reforestation initiatives in preparation for the 2023 German National Garden Show (BUGA). A total of 2,809.40 euros was passed on to the “Bundesgartenschau Mannheim 2023 gGmbH”. The money was used to plant four Caucasian wingnuts in the eastern part of the newly emerging Käfertal park bowl in May 2021. Looking at the survey results, it can be seen that the willingness of participants to donate trees is significantly greater than the willingness to voluntarily offset CO2 by retiring certificates from emissions trading.

The ZEW Indicator of Economic Sentiment for Germany decreased in the current August 2021 survey, falling 22.9 points to a new reading of 40.4 points compared to July. This is the third time since May that the indicator has dropped, this time even somewhat stronger than in the previous month. The assessment of the economic situation in Germany improved in August, and currently stands at 29.3 points, 7.4 points higher than in July.

Soon after the outbreak of the COVID-19 pandemic, many companies in Germany expected a long-term expansion of working from home arrangements. A ZEW survey conducted in June 2021 has confirmed the companies’ early forecasts. Some companies have even increased their expectations about the use of working from home after the pandemic ends. The survey also found that many companies, especially larger ones, have equipped their employees with digital devices over the course of the pandemic.

On 30 July, the European Banking Authority (EBA) published the results of the stress test it carried out on 50 banks in the euro area. Dr. Karolin Kirschenmann, deputy head of the “International Finance and Financial Management” Research Department at ZEW Mannheim, has commented on this.

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

Lea Borchert, Ralph de Haas, Karolin Kirschenmann, and Alison Schultz
How the Withdrawal of Global Correspondent Banks Hurts Emerging Europe

Julian Oliver Dörr, Jan Kinne, David Lenz, Georg Licht, and Peter Winker
An Integrated Data Framework for Policy Guidance in Times of Dynamic Economic Shocks

Xiaomeng Chen, Chris Forman, and Michael Kummer
Chat More and Contribute Better: An Empirical Study of a Knowledge-Sharing Community

Oliver Kalsbach and Sebastian Rausch
Pricing Carbon in a Multi-Sector Economy With Social Discounting

Leonardo Maria Giuffrida and Emilio Raiteri
Buyers’ Workload and R&D Procurement Outcomes: Evidence From the US Air Force Research Lab

Kenneth Gillingham and Pei Huang
Racial Disparities in the Health Effects From Air Pollution: Evidence From Ports

Angelika Ganserer
Non-Compliance With Temporary Agency Work Regulations: Initial Evidence From Germany

Bettina Chlond, Claire Gavard, and Lisa Jeuck
Supporting Residential Energy Conservation Under Constrained Public Budget: Cost-Effectiveness and Redistribution Analysis of Public Financial Schemes in France

Sebastian Blesse, Massimo Bordignon, Pierre C. Boyer, Piergiorgio Carapella, Friedrich Heinemann, Eckhard Janeba, and Anasuya Raj
The Future of the European Fiscal Union: Survey Results From Members of National Parliaments in France, Italy and Germany

Sebastian Blesse, Friedrich Heinemann, and Tommy Krieger
Informationsdefizite als Hindernis rationaler Wirtschaftspolitik: Ausmass, Ursachen und Gegenstrategien (Information Deficits as an Obstacle to Rational Economic Policy: Extent, Causes and Counterstrategies)

In order to support the nationwide containment measures against the coronavirus, ZEW is examining to what extent the events listed here can take place virtually. Individual dates may be postponed. 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: Johannes Spinnewijn (London School of Economics and Political Science (LSE), United Kingdom)
Location of the event: Online and University of Mannheim

Speakers: Florian Scheuer (University of Zurich, Switzerland) and Wolfgang Schön (Max Planck Institute for Tax Law and Public Finance, Munich)
Location of the event: Online

Speaker: Michael Ostrovsky (Stanford University, USA)
Location of the event: Online

Speaker: Uwe Sunde (LMU Munich)
Location of the event: Online and University of Mannheim

Location of the event: Online

Speaker: Anne Berner (University of Göttingen)
Location of the event: Online

Speaker: Robert Seamans (New York University, USA)
Location of the event: Online

Speaker: Po-Hsuan (Paul) Hsu (National Tsing Hua University, Hsinchu City, Taiwan)
Location of the event: Online

Speaker: Bastian Krieger (ZEW)
Location of the event: Online

Speakers: Professor Philippe Aghion, PhD (College de France, INSEAD and London School of Economics) and Professor Achim Wambach, PhD (ZEW)
Location of the event: Online

Tenure-Track Researcher (100 %, f/m/d) Banks and Financial Intermediation

Picture Credits: personalia article of 20.08.2021: Thomas Mayer, news article of 16.08.2021: Anna Logue Fotografie, press release of 16.08.2021: Anna Logue Fotografie, press release of 13.08.2021: iStock.com/instamatics, press release of 11.08.2021: BUGA23, news article of 10.08.2021: Volksbank Weinheim Stiftung/ZEW, news article of 03.08.2021: iStock.com/Marc Bruxelle
All further pictures: ©ZEW