Media Releases

An unprecedented cache of documents shows that Chinese loan contracts have unusual secrecy provisions, collateral requirements, and debt renegotiation restrictions.

For the EU's ambitious climate policy to be successful, the EU must join forces with its most important trading partners in a so-called climate club: Its members would agree on a minimum price for CO2 emissions and safeguard themselves against relocation of production to non-member countries by means of a CO2 border adjustment system. This is what the Scientific Advisory Council to the German Federal Ministry for Economic Affairs and Energy (BMWi) proposes in a new report.

Despite the ongoing lockdown and rising infection figures, the Kiel Institute is more optimistic about economic performance in Germany than it was in its previous forecast in winter. The reason is the upward trend in industrial activity due to stronger tail winds from business abroad. As vaccination protection improves, strong consumer demand will join the recovery and boost the domestic economy. The Kiel Institute revises its economic forecast upwards and expects gross domestic product to grow by 3.7 percent in 2021 (previously 3.1 percent) and by 4.8 percent in 2022 (4.5 percent). On the global scene, economic activity is particularly stimulated by higher momentum in the US recovery.

The Kiel Institute for the World Economy (IfW Kiel) is expanding its economic research on Africa. A new research cluster will combine the most relevant economic policy topics and bring together researchers. It will focus on companies and entrepreneurial potential in African markets, trade, and investment policy as well as questions of macroeconomic development, stability and public finances.

Germany is one of the most important target countries for Chinese investors and ranks tenth among all countries in terms of Chinese FDI stock abroad. Particularly the transport sector and the technology sector in Germany received a great amount of investments from Chinese investors in recent years. Although China has recently focused more than ever on geostrategic investments in countries of the "Belt and Road Initiative," investments in Germany remain strategically important for Chinese investors to gain access to key Technologies.

Women from Western countries are more in favor of income redistribution than men. This gender discrepancy is only evident when earnings are uncertain and depend on one's own performance. While men are usually over-optimistic about their performance, women are more realistic about theirs. Therefore, women use the opportunity of a redistribution mechanism as a hedge against poor performance and—depending on it—poor pay, even if there are no objective reasons for it.

A new network is stepping up research into the sustainability of global value chains. In addition to research, it strives for an intensive exchange with political decision-makers and other interest groups.

The economic recovery in the euro area is currently still a long time coming, but is expected to be strong from the second quarter onward. Thanks to numerous short-time work programs in the Member States, the conventional unemployment rate rose only moderately in 2020, but including short-time workers unemployment shot up to as much as 35 percent in France and 17 percent in Germany. Public debt in the euro area will now exceed 100 percent of gross domestic product.

Due to the special structure of the global coffee trade, smallholders in coffee-growing countries have few opportunities to increase their value added and thus earn higher incomes. This is particularly true for growing Arabica coffee beans that are usually used for coffee roasting. The few large multinational coffee enterprises that dominate the market therefore have an immense social responsibility towards their suppliers.

Foraging humans find food, reproduce, share parenting, and even organise their social groups in similar ways as surrounding mammal and bird species, depending on where they live in the world, new research has found. The study, published today in Science, shows environmental factors exert a key influence on how foraging human populations and non-human species behave, despite their very different backgrounds.

The second wave of the Corona pandemic deals a noticeable blow at Germany’s economy, but does not overturn it. The recovery is interrupted for six months, but then comes back strongly. The Kiel Institute lowers its forecast for gross domestic product (GDP) growth in 2021 by 1.7 percentage points to 3.1 percent. The main negative effect stems from stricter social distancing regulations that impede many consumer-related sectors during the winter half-year. The slight upward revision of the current year’s GDP number (slump of 5.2 percent vs. previous forecast of 5.5 percent) is due to a stronger than expected rebound in the third quarter. The forecast assumes that the pandemic will be overcome by next fall.

Trump has failed with his campaign promises to achieve complete revitalization of the US manufacturing industry. His economic policy has not led to any substantial improvement. Even the industries that enjoyed particular protection by the Trump administration's trade policy are not showing extraordinarily strong developments. In the automotive industry, the situation has actually deteriorated somewhat.

Germany's financial contribution to global security within NATO is higher than often criticized by US President Trump. This is because NATO members, especially the US, are increasingly pursuing geostrategic goals not only by using or threatening to use armed force, but also with the help of economic sanctions. In European countries, especially in Germany, these sanctions cause high costs, whereas in the US they hardly cause any harm.

During the peak phase of the corona pandemic, Chinese exports of critical medical goods such as protective masks went primarily to economic and political partners. Chinese companies were able to push through drastic price increases against industrialized countries like Germany. "In order to secure their supply of critical medical goods, countries are well advised to diversify their sources of supply or develop close relations with China's provinces, for example through local investments or city and province partnerships," said Andreas Fuchs, head of the Kiel Institute China Initiative

The corona pandemic leaves substantial marks in the German economy and its impact is more persistent than assumed in spring. In their autumn report, the leading German economic research institutes have revised their economic outlook downwards by roughly one percentage point for both this and next year. They now expect gross domestic product to fall by 5.4 percent in 2020 (previously -4.2%) and to grow by 4.7 percent (5.8%) in 2021 and 2.7 percent in 2022.

The Kiel Institute for the World Economy (IfW Kiel) is expanding its research and consulting activities on international development by appointing a new professor and expanding its Africa focus. Tobias Heidland (né Stöhr, 34) will take over as head of the research center "International Development" at the Kiel Institute and assumes a professorship in economics at the Christian-Albrechts-Universität zu Kiel (CAU) on October 1, 2020.

The economic upturn in Germany is losing momentum, after a rapid recovery following the end of the Corona lockdown. Researchers at the Kiel Institute for the World Economy expect gross domestic product to fall by 5.5 percent in 2020. This means that the slump this year will be 1.3 percentage points lower than feared in the summer. However, they now expect growth of 4.8 percent next year instead of the 6.3 percent in their previous forecast. Ongoing restrictions for some industries (e.g. travel) and weaknesses in the global economy in general is slowing down the recovery.

Governments that successfully contain the pandemic and adopt strict countermeasures are the big winners of the Corona Crisis—with approval rates increasing by more than 7 percentage points since February 2020. In comparison, governments that follow loose pandemic policies to limit economic damage perform significantly worse in terms of public support, especially when Covid-19 cases continue to rise. The data show that infection numbers are the main driver for government approval in recent months, with a larger impact than economic indicators. This is the result of a first wide-ranging study on the political impact of the Corona crisis that uses a new dataset from 35 countries for January to July 2020.

Trade relations between Africa and Asia, especially China, increase the prosperity of African countries. This is because they have been able to increase the value added of their exports and also export more to the rest of the world. Moreover in many African countries, China is not the most important trading partner at all, but other Asian countries, especially India.

In the second quarter of 2020, economic activity in the more than 5,000 Free Zones (or Special Economic Zones) worldwide is severely affected by the COVID-19 pandemic. This is the result of the latest F-WEB, a quarterly survey conducted by the Kiel Institute in cooperation with the World Free Zones Organization. The index value for economic sentiment has fallen drastically from +48 to -20 since February—registering a negative value for the first time since the launch of the survey. The expectations index for the coming three months is also considerably lower than in the previous quarter. Nevertheless, initial cautious optimism can be seen particularly in Asian Special Economic Zones.

On average, populist governments record significantly lower increases in popularity in the Corona crisis than non-populist ones, even though they usually introduced similar policies to contain the pandemic. At the same time, however, populists are making greater use of emergency laws to weaken democratic competition and institutions in their country, according to an evaluation by researchers at the Kiel Institute. In the long run, the success of populist governments is likely to depend on the economic consequences of the crisis and whether emergency legislation is withdrawn once the pandemic ends.

Global inter-state lending to tackle the corona crisis could reach record levels, exceeding the huge international financial assistance after 2008. The planned 750 billion euro Corona Reconstruction Fund of the European Union is historically common practice, especially between closely interconnected states. This emerges from an empirical analysis by the two IfW researchers Christoph Trebesch and Sebastian Horn with the new World Bank Chief Economist Carmen Reinhart, in which they evaluated financial flows between states from 1790 to the present.

The economic impact of the Covid 19 pandemic can be quantified with increasing reliability. In its regular summer forecast, the Kiel Institute now estimates the economic slump for 2020 at 6.8 per cent, and next year the growth rate should be 6.3 per cent. The German government's economic stimulus package does not significantly shape the picture, as it largely misses the core of the crisis. The global weakness in investment is having a negative impact on the export business. At the top of the labour market, one million jobs are lost. As a result of the crisis, Germany's current account surplus will fall to below 5 percent.

The Kiel Institute investigates negative emission technologies with regard to their economic and social potential in cooperation with GEOMAR and 12 other institutions.