Alexandra Avdeenko, Onur Eryilmaz, 03 August 2021

Sudden floods across Central Europe have led governments to initiate bailouts, putting decades-old debates on how to respond to future natural disasters back on the policy agenda. Using a representative longitudinal dataset, this column provides evidence that the 2013 floods in Germany reduced willingness to take risks among men living close to the flooded areas, but had no such effect on women. It also finds that affected households were significantly more likely to hold life insurance after the floods. The findings suggest that a portion of the costs associated with natural disasters is likely to be internalised by households at risk, with implications for governments seeking to provide incentives for household-level adaptation measures such as insurance or better building standards. 

Margherita Russo, Claudia Cardinale Ciccotti, Fabrizio De Alexandris, Antonela Gjinaj, Giovanni Romaniello, Antonio Scatorchia, Giorgio Terranova, 02 August 2021

Many countries turned to use contact-tracing apps to help control the spread of COVID-19. Despite public policy efforts, however, tracking apps have not been a success because of public concerns over data privacy. This column compares nine countries to explore the conditions behind the successful use of digital technologies and AI for public purposes. Individuals give over personal data to internet companies but are wary of sharing their data for the public interest. Citizen trust in public interventions and commitment to social goals need to be nurtured in normal times to be effective in emergencies.

Alexander Cuntz, 27 July 2021

As Covid-19 closed concert halls, galleries, and theatres it cut off the incomes of the people who worked in them. One year on, what has been the effect of the pandemic on artistic income? Alexander Cuntz of the World Intellectual Property Organisation has used unique incomes data from Germany to estimate how incomes have been affected, and how important states support has been for artists.

Alessandra Bonfiglioli, Federica De Pace, 25 June 2021

The rise in income inequality and, more prominently, in the wage gap between men and women has been one of the major concerns among policymakers and the public in recent years. This column presents new evidence from Germany on the impact of exports on the gender wage gap which shows that an increase in a plant’s exports significantly reduces the wage gap between male and female co-workers in white-collar occupations, but widens it for employees in blue-collar occupations. The findings suggest that designing policies that support women taking part in trade, especially in positions in which they would benefit from their comparative advantage, is crucial to maximise the potential benefits from globalisation.    

Sebastian Siegloch, Nils Wehrhöfer, Tobias Etzel, 04 June 2021

Increasing regional inequality has become a major concern for policymakers both in the US and Europe. This column investigates the effects of a large place-based investment subsidy targeted at manufacturing firms in East Germany. It shows that a decrease in the subsidy rate leads to a decrease in manufacturing employment, highlighting spillovers to untreated sectors in treated counties and untreated counties connected via trade and local taxes. It also finds that the place-based policy is at least as efficient as cash transfers for the unemployed but is more effective in curbing regional inequality overall.

Mathias Hoffmann, Iryna Stewen, Michael Stiefel, 22 May 2021

Germany’s current account surplus and corporate savings have both been increasing in the last decade. This column shows that German private investment has been low because it has been crowded out by local public bank lending to municipalities. Banks' statutory public lending requirements and the debt brake have both played a role in this, exacerbating the contractionary effect of fiscal consolidation.

Clara von Bismarck-Osten, Kirill Borusyak, Uta Schӧnberg, 08 May 2021

Deciding whether to close schools to contain the spread of Covid-19 requires balancing the harm such closures inflict on families against their effectiveness in stopping the spread of disease. This column provides evidence from Germany that school closures did not contain infections among young people or adults in the summer of 2020 – when infection rates were low – or during the pandemic’s autumn resurgence. Thus, the benefits of school closures may not outweigh their costs to children and parents, particularly mothers. 

Wolf-Fabian Hungerland, Nikolaus Wolf, 02 May 2021

The history of globalisation is usually told in two parts, separated not only by two world wars but also by changes in technology, institutions, and economic logic. This column reconsiders that narrative. Using detailed new evidence on Germany’s foreign trading practices from 1800 to 1913 (the ‘first’ globalisation), it finds that most growth took place along the extensive margin, while 25–30% of trade was intra-industry. If the first globalisation saw substantial heterogeneity within countries and industries, it may be time to re-think the ‘classical’ versus ‘new’ trade paradigm. 

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.

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