News

Three young economists based in Europe and the United States received this year’s Excellence Awards in Global Economic Affairs from the Kiel Institute for the World Economy. Created to promote young talent, the Excellence Awards are open to researchers and academics up to 35 years. The Theodor-Wille-Heinrich-Diedrichsen Journalismuspreis Fair Trade was awarded to two journalists for their extensive research on sexualised violence and coercion among harvest workers in Mediterranean agriculture.

At this year's Hayek-Days in Vienna, Prof. Dr. Stefan Kooths was elected as the new Chairman of the Friedrich August von Hayek-Gesellschaft.

The German economy is cooling significantly and the global political uncertainty is affecting the German economy. In their current economic outlook, the researchers of the Kiel Institute for the World Economy revise their forecast for growth in gross domestic product (GDP) for 2019 to 0.6 percent (previously 1.0 percent) and for 2020 to 1.6 percent (previously 1.8 percent). Unemployment is unlikely to fall any further and public budget surpluses will fall to 33 billion euros. Kiel Institute President Felbermayr calls for a corporate tax reform and the abolition of the solidarity surcharge.

The new EU Parliament tends to be slightly more protectionist towards free trade agreements than before. Despite a stronger green faction, no stronger ecological impulses than hitherto can be expected. Kiel Institute President Gabriel Felbermayr comes to this conclusion by evaluating the previous voting behavior of the fractions in the EU Parliament.

Kiel Institute President Gabriel Felbermayr sees polarisation within the EU as a warning signal.

The EU provides its members with high income gains by reducing trade costs. Thanks to the single market, the customs union, the euro, the Schengen agreement, and trade agreements with third parties, real GDP is about 940 billion euros higher each year. Germany alone benefits from an annual plus of a good 170 billion euros. Of all the EU countries, the United Kingdom has the smallest relative profits, while small peripheral countries have the largest.

At the example of Ghana a new KCG study shows, how exporting contributes to the development of a country.

Increasing development aid to fight the “root causes of migration” will not reassure immigration critics. While the effectiveness of aid in reducing migration is still not fully established, new research shows that the public’s belief in development aid as a policy instrument is strongly driven by existing attitudes on immigration.

The Kiel Institute Forecasting Center has been ranked as top economic forecasters 2019. (external link)

Kiel Institute President Gabriel Felbermayr considers US President Trump's recent tariff threat to be a bluff and refers to calculations on the consequences of the trade dispute, according to which the USA would have to accept welfare losses of up to 9.5 billion US dollars.

Economic output in Germany is likely to have increased by 0.4 percent in the first quarter of the current year. This would have made the economic momentum stronger than many had expected. This is the conclusion drawn from the preliminary flash estimate published by Eurostat for economic output in the euro zone in the first quarter of 2019, which is also based on previously unpublished data on German GDP.

China's investments have risen sharply worldwide in recent years, but are likely to have peaked already because China is no longer running current account surpluses. Germany seems particularly attractive to Chinese investors, but the boom in recent years is due to a few large transactions. In 2018, Germany invested significantly more abroad than China. The concern about a systematic and nationwide acquisition of German companies is therefore exaggerated.

Germany’s leading economics research institutes have revised their forecasts for economic growth in 2019 significantly downward. They expect Germany’s gross domestic product to increase by 0.8 percent. This is more than one percentage point less than in autumn 2018, when the forecast was still for 1.9 percent growth. In contrast, the institutes confirm their previous forecast for the year 2020: gross domestic product is expected to increase by 1.8 percent. These are the results of the Joint Economic Forecast for spring 2019, which will be presented in Berlin on Thursday.

The World Trade Organization (WTO) has announced its decision in the dispute over illegal subsidies for the US aircraft manufacturer Boeing. The USA has lost in the last instance before the WTO.

Following an evaluation in autumn 2018, the Leibniz Association attested the Kiel Institute for the World Economy (IfW Kiel) very good scientific achievements in its various fields of work and praised the expansion of policy advice at national and international level. This is the conclusion of the evaluation report now published by Leibniz, which forms the basis for the Institute's public funding for at least another seven years. Under its new President Gabriel Felbermayr, the Institute can thus continue its successful work on a financially secure basis.

The nominated winners of the Global Economy Prize 2019 have been confirmed. Awarded by the Kiel Institute in partnership with the City of Kiel and Schleswig-Holstein Chamber of Commerce and Industry (IHK), the prize is now being presented for the 15th time. It aims to encourage international efforts to tackle major global economic challenges and carries no prize-money.

With regards to trade effects, the creation of the euro is a success for all member states. The single currency reduced transaction costs and thus increases real incomes for all member states. In particular, trade in goods is intensified by the euro. Luxembourg and Belgium benefit the most, Italy and Greece the least. Germany is in between.

The flagging last half-year is still having an effect. The business cycle researchers at the Kiel Institute have revised their forecast for the growth rate of German GDP in 2019 from 1.8 percent to 1.0 percent. For 2020, they continue to expect growth of 1.8 percent. However, despite the economic slowdown, overall capacity utilization remains above average. The surpluses of public budgets are likely to fall significantly.