DIW Economic Bulletin

Implicit State Guarantees Exacerbate Problem: Separated Banking System Alone Not a Solution

Many banks are now too big, complex, and closely interconnected to be liquidated. When they run into difficulties, they threaten the entire financial system of their economic area. Five years of financial crisis have not alleviated but exacerbated this problem. The cost of stabilizing banks is enormous, posing serious challenges to the states affected. In addition, such state guarantees create dangerously ...

Ganzes Heft

Measuring Well-Being: W3 Indicators to Complement GDP

Plenty of people in Germany, including politicians and researchers, believe that gross domestic product (GDP) is an outdated indicator of a society's prosperity. Therefore, at the end of 2010, the German Bundestag, the federal parliament, established a study commission (Enquete Kommission) tasked with developing an alternative to GDP for measuring growth, wealth, and quality of life. This commission ...

In Germany, Equal Opportunities Are Almost as Bad as in the US and Much Worse Than in Denmark: Nine Questions to Daniel Schnitzlein

Low Level of Equal Opportunities in Germany: Family Background Shapes Individual Economic Success

For many years, securing equal life opportunities has been a normative goal shared by all democratic societies in the western world. Although, in principle, all citizens enjoy the same rights, in reality, individual life opportunities still vary according to family background which, in turn, shapes the prevailing pattern of social inequality. This is not a specifically German phenomenon. Based on a ...

Ganzes Heft

Members of German Federal Parliament More Risk-Loving Than General Population

Politics and business often involve making risky or dangerous decisions whose outcomes can be predicted only with difficulty, if at all. As attitudes toward risks and dangers vary between individuals, it is reasonable that people with different attitudes are active in areas requiring decisions with differing degrees of risk. For example, it has frequently been observed that entrepreneurs are more risk-loving ...

Innovation Policy for SMEs Proves Successful

The innovation policy of the German government and Länder provides small and medium-sized enterprises (SMEs) with a wide range of programs to promote their research and development (R&D) and focuses, in particular, on the transfer of knowledge. In recent years, the programs have been streamlined and funding substantially increased as part of the second economic stimulus package. SMEs have profited ...

A Financial System Should Be Able to Restore Stability Autonomously: Seven Questions to Dorothea Schäfer

Sustainable Financial Markets: Financial Transaction Tax and High Capital Buffers Indispensable

The sustainability of the financial markets is a requirement that has only appeared on the economic policy agenda very recently, whereas a stable financial system has been a declared goal for decades. The relationship between sustainability and stability is, however, still unclear. The two terms are often used synonymously but stability is only one part of sustainability. The following outlines the ...

Ganzes Heft

The German Financial Sector: Male Dominance in Top Decision-Making Bodies Remains Pervasive

In the German financial sector, the majority of employees are women, but it is still men who hold the top positions. With women making up only 4.2 percent of the boards of the largest banks and savings banks, they were still vastly underrepresented at the end of 2012 (up 1 percentage point from the end of 2011). The story is similar on the boards of the major insurance companies. The situation is somewhat ...

Slight Rise in Number of Female Executives: Seven Questions to Elke Holst

Slightly More Women in Germany's Corporate Boardrooms: Especially in DAX 30 Companies

Despite the commitment that has been expressed by German companies to bringing more women into top management, at the end of 2012, only four percent of all seats on the executive boards and just under 13 percent on the supervisory boards of the top 200 companies in Germany were occupied by women. This corresponds to an increase of one percentage point on the previous year in both cases. Nevertheless, ...

Ganzes Heft

Growth and Investment Dynamics in Germany After the Global Financial Crisis

The German economy recovered more rapidly than the majority of other developed countries from the severe slump that the global economic and financial crisis brought in its wake. Weak demand in the euro area was offset by robust growth in exports to countries outside the region. The German economy's strong competitive position on global markets, particularly on the dynamic emerging and developing markets, ...

Germany Needs Stronger Wage: Five Questions to Karl Brenke

Industrial Development: France and Germany Drifting Apart

The significance of the manufacturing sector for the economies of both the European Union and the euro area has declined dramatically over the past ten years. However, development varied between the individual member states, which is particularly evident in a comparison between France and Germany. The manufacturing industry in Germany was able to maintain its position within the national economy, halting ...

Ganzes Heft

A Skeptical View of Mechanisms for Business Cycle Harmonization in the Euro Area

The European Monetary Union brought with it a standardization of monetary policy and a system of fixed exchange rates. This was accompanied by disincentive effects which, in turn, resulted in serious economic distortions. Proposals are currently being made - not only by DIW Berlin - as to how compensatory payment mechanisms could be used to better synchronize the economic development of the member ...