Emanuel Moench, Loriana Pelizzon, Michael Schneider, 23 March 2021

In March 2020, a ‘dash for cash’ driven by the Covid-19 crisis affected the liquidity of the US Treasury bonds market as well as numerous other financial markets around the globe. This column investigates how euro area sovereign bond markets fared during the same period. While deteriorations in sovereign debt market liquidity are evident, these appear to be driven by a ‘dash for collateral’ in euro-denominated safe assets. This suggests some differences from the US experience, as well as variations across European countries. 

Alexandru Barbu, Christoph Fricke, Emanuel Moench, 04 March 2021

Institutional funds manage the majority of the assets under management of all German investment funds. This column documents that institutional funds act in a strongly procyclical manner, by actively investing in higher-yielding, longer-duration and lower-rated assets as yield spreads compress. The authors show that this intensifies asset price volatility and highlight reasons behind this procyclical investment behaviour.

Christina Boll, Till Nikolka, 02 March 2021

The role of intergenerational contact in the spread of Covid-19 has been the subject of debate since the onset of the pandemic. This column uses survey and administrative data to explore the link between grandparental childcare and Covid-19 infection rates in Germany. The findings cast doubt on simplistic narratives that suggest a link between intergenerational contact and infection rates. The statistical significance of the positive relationship between the frequency of regular grandparental childcare and Covid infection rates breaks down as soon as potentially confounding factors, in particular the local Catholic population share, are controlled for.

Samuel Delpeuch, Etienne Fize, Philippe Martin, 12 February 2021

How much can trade imbalances account for the rise in protectionism of the past ten years? This column reveals that both bilateral and multilateral trade imbalances are strong predictors of protectionist attacks, partly – but not entirely – driven by the US and the Trump years. Moreover, countries with more expansionary fiscal policies react to the ensuing trade imbalance by a more protectionist trade policy. A transatlantic gap in the fiscal response to the COVID crisis may therefore pave the way to renewed trade tensions.

Johannes Buggle, Thierry Mayer, Seyhun Orcan Sakalli, Mathias Thoenig, 25 January 2021

The recent refugee crisis has fuelled discussions about policies restricting immigration. This column quantifies the extent to which asylum policies affect emigration by analysing the migration decisions of German Jewish refugees in the 1930s. Policies have large effects on migration as the effects are multiplied through peers who influence each other in the decision to emigrate. Removing work restrictions for refugees in the recipient countries after the Nuremberg Laws in 1935 would have led to a 28% increase in Jewish emigration out of Germany.

Liuchun Deng, Verena Plümpe, Jens Stegmaier, 16 January 2021

Robots will shape the future of labour. This column uses a large-scale, plant-level survey to provide the first microscopic portrait of robotisation in Germany, the country with the highest robot density in Europe. The findings reveal substantial within-industry heterogeneity – robot use remains relatively rare and its distribution highly skewed. Factors that influence a plant’s decision to adopt robots include size, skill composition, labour costs, and exporter status. New adopters have contributed substantially to the recent growth in Germany’s robotisation.

Cevat Giray Aksoy, Panu Poutvaara, Felicitas Schikora, 11 December 2020

Around 2.4 million refugees and irregular migrants arrived in Europe from 2015 to 2016. This column presents systematic evidence on how local unemployment and attitudes towards immigrants at refugees’ initial place of residence shape their multi-dimensional integration in the context of the European refugee crisis. Leveraging Germany’s centralised allocation policy, which exogenously assigns refugees to live in specific counties, it finds that high initial local unemployment negatively affects refugees’ economic and social integration. Further, favorable attitudes towards immigrants promote the economic and social integration of refugees.

Maja Adena, Ruben Enikolopov, Maria Petrova, Hans-Joachim Voth, 19 November 2020

In conflicts, adversaries aim for victory by using both direct and indirect forces to break the enemy’s will to resist. During WWII, Allied forces used strategic bombing and radio propaganda to undermine German morale. This column compares German domestic resistance to the Nazi regime, based on treason trial records, with the monthly volume of bombing and the locations of BBC radio transmitters. Where radio reception was better and Allied air forces bombed more heavily, German domestic resistance was markedly more likely, despite the draconian punishments for even the mildest transgressions.

Thomas Plümper, Eric Neumayer, 16 November 2020

What role did the summer holiday season play in increasing Covid-19 infections in Germany? Exploiting the staggered nature of school holidays in Germany, this column estimates the effect of school holidays on growth in infections across the country Germany. It finds that the estimated effect equates to 48.7% of the average growth rate across German districts during their respective final week of holidays. While this is similar to previous aggregate findings, the findings also reveal how the effect differs across the 16 federal states and is conditioned by how rich a district is and by the share of foreigners amongst its resident population.

Elisabeth Grewenig, Philipp Lergetporer, Katharina Werner, Ludger Woessmann, Larissa Zierow, 15 November 2020

A key feature of school closures is that there is no trained educator in the room to help. This column argues that low-achieving students are particularly affected by the lack of teacher support. Based on a German time-use survey, it finds that students on average reduced daily learning time by about half during the school closures. This reduction was significantly larger for low-achieving students, who disproportionately replaced learning time with activities deemed detrimental to child development such as computer gaming rather than with more conducive activities such as reading. 

Jan Pieter Krahnen, Katja Langenbucher, Christian Leuz, Loriana Pelizzon, 12 November 2020

The Wirecard scandal raises many questions about the effectiveness of market and institutional oversight. Several mechanisms against corporate fraud and deception have failed in some respects. This column discusses important implications of the scandal and make eight suggestions for the market and institutional oversight architecture in Germany and in Europe.

Thiess Buettner, Boryana Madzharova, 27 October 2020

Facing the economic consequences of the Covid-19 pandemic, governments all over the world are considering providing a fiscal stimulus. A potentially powerful instrument to do so is a broad-based consumption tax such as VAT. This column argues that changes in VAT may have some effect in stimulating spending on certain consumer durable goods such as household appliances. However, these effects may be heterogenous across different product types and the timing and perceived credibility of the announcements are also important factors for policymakers to consider.

Brian Nolan, Juan C. Palomino, Philippe Van Kerm, Salvatore Morelli, 19 September 2020

Whether and how much intergenerational transfers contribute to wealth inequality is still subject to debate. This column analyses household survey data on inheritance and gifts inter vivos in France, Germany, Great Britain, Ireland, Italy, Spain, and the US to relate current household wealth levels and inequality to the receipt of intergenerational wealth transfers. In these countries, large transfers increase overall wealth inequality. Strengthening taxation capacity and instating lifetime capital acquisitions tax for gifts and inheritances may help counter the dis-equalising effect of intergenerational transfers.

Sebastian Blesse, Massimo Bordignon, Pierre C Boyer, Piergiorgio Carapella, Friedrich Heinemann, Eckhard Janeba, Anasuya Raj, 18 August 2020

The ongoing Covid-19 crisis has the potential to change the institutional design of the European Union (EU). This column analyses survey data asking parliamentarians from France, Italy, and Germany about their stances on a broad range of reform issues covering fiscal and monetary policies as well as EU governance mechanisms. It finds that in general, party membership is quantitatively more important than nationality in determining political stances. Further, while national parliaments still differ on many policies, a broader consensus emerges for reforms on EU institutions such as providing the EU parliament with the right of proposing new legislation.

Gregori Galofré Vilà, Christopher Meissner, Martin McKee, David Stuckler, 16 August 2020

Many Western countries pursued deep austerity measures in response to debts from the financial crisis of 2007-2008, and may again do so in the wake of COVID-19 stimulus packages. This column reviews how in the early 1930s, austerity measures worsened social suffering and contributed to political unrest paving the way for the rise of the Nazi Party in Germany. The authors argue that the absence of a coherent response to social suffering from the Weimar government worsened the slump, contributing to the radicalisation and polarisation of the German electorate.

Almut Balleer, Sebastian Link, Manuel Menkhoff, Peter Zorn, 27 July 2020

The relative importance of supply and demand during the Covid-19 pandemic is a key input into effective policy design. This column uses firm-level data on planned price changes by firms from a monthly survey covering all relevant sectors of the German economy to show that both demand and supply forces coexist, but that demand deficiencies dominate in the short run.

Felix Kersting, Iris Wohnsiedler, Nikolaus Wolf, 11 July 2020

Max Weber famously hypothesised that the Protestant work ethic fostered modern economic development. Does religion matter for economic success? This column revisits Weber’s hypothesis in the context of 19th-century Prussia. Protestantism did not matter for savings, literacy rates, or income levels across Prussian counties after 1870. Instead, there are large differences between ethnic groups, likely due to ethnic discrimination. Nationalism must be taken into account to understand Weber’s writings.

Timo Mitze, Reinhold Kosfeld, Johannes Rode, Klaus Wälde, 22 June 2020

Confronted with a novel, aggressive coronavirus, Germany implemented measures to reduce its spread since March 2020. Requiring people to wear face masks in public places has, however, been a subject of controversy and isolating the effect of mask-wearing on the spread of COVID-19 is not simple. This column looks at the town of Jena and other German regions that introduced face masks before the rest of the country to see whether the requirement makes a difference in the number of new COVID-19 cases. Requiring face masks to be worn decreases the growth rate of COVID-19 cases by about 40% in Germany.

Thomas Plümper, Eric Neumayer, 11 June 2020

Is Covid-19 a ‘rich man’s disease’, as many citizens in poorer countries believe it to be? This column descibes how in Germany, infections began with individuals returning from skiing holidays. In the first phase of the pandemic, infection rates were higher in richer areas and lower in more socially deprived districts. In the second phase, the ability to socially distance oneself mattered more – an ability that is itself socioeconomically stratified. Richer districts are now seeing fewer new infections, and the initial safety advantage of more socially deprived districts has disappeared.

Richard Bluhm, Maxim Pinkovskiy, 06 June 2020

The prospect that BCG – a vaccine used primarily against tuberculosis – might offer protection from COVID-19 has become an understandably popular hypothesis. This column finds that hope misplaced. The authors exploit a natural experiment, overlaying the large difference in BCG vaccination rates with the large differences in COVID-19 infection rates between the former East and West Germany. They find that the differences are attributable not to BCG, but to the West’s copious commuter flow patterns and the fact that the epidemic arrived there first.



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