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:The Macroeconomic Policy Institute (IMK)

The Macroeconomic Policy Institute (IMK) is an independent academic institute within the Hans-Böckler-Foundation, a non-profit organisation fostering co-determination and promoting research and academic study. The Foundation is linked to the German Confederation of Trade Unions (DGB). The IMK was founded in 2005 to strengthen the macroeconomic perspective both in economic research and in the economic policy debate. The IMK analyses business cycle developments and conducts economic policy research, notably on fiscal and monetary policy, labour markets, income distribution and financial markets. The Institute seeks to address the challenges facing macroeconomics and economic policy in the wake of the global financial crisis.

25th FMM Conference: Macroeconomics of Socio-Ecological Transition

Social inequalities, climate change and environmental pollution question the sustainability of capitalist modes of pro-duction, consumption and policies. Macroeconomists of both orthodox and heterodox traditions have long focussed on economic growth as the central means to development of the global South, prosperity and solution to distributional conflicts. However, the externalities of economic growth should be taken into account, because they have an impact on welfare and its distribution – within and between countries, within and between generations. At our conference, we will discuss what macroeconomists can contribute to this debate and learn from other fields. How does global capital-ism shape the environment? What can macroeconomic policies do to facilitate a just transition towards a sustainable world economy? What are the feedbacks from distributional effects and ecological developments back to the macro economy? How to improve macroeconomic modelling by including socio-ecological dimensions?

25th FMM-Conference 2021
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Current Publications

IMK Working Paper 207 : Dissecting the COVID19 supply shock: Which role did school closures play?

According to our survey among the German labour force, school closures during the first wave of the COVID-19 crisis in the spring of 2020 have led to a relatively small impact on parents’ labour supply of only 0.4 percent of economy-wide working hours in April 2020 and June 2020. School closures are hence more of a long-term economic and social problem than a short-term labour supply shock.

IMK Grafik zur Publikationsreihe Working Paper

IMK Policy Brief 98 : The macroeconomic effects of the EU Recovery and Resilience Facility

Study finds public capital stocks throughout the EU to increase markedly due to RRF. In some hard-hit European countries, the RRF would offset a significant share of GDP lost during the pandemic. As gains in GDP much stronger in (poorer) southern and eastern European countries, RRF to potentially reduce economic divergence. All countries to experience lower public debt ratios over the next years.

IMK Grafik zur Publikationsreihe Policy Brief

IMK Working Paper 206 : Fiscal rules in good times and bad

I estimate fiscal reaction functions to analyze the cyclical behavior of discretionary measures in the euro area and the potential impact of changes in the fiscal framework. The core is to analyze whether fiscal rules have an asymmetric impact on discretionary measures over the cycle. First, results confirm the general perception that overall discretionary fiscal policy in the EMU is marginally procyclical. Procyclicality is, however, characterized by strong fiscal tightening in contractions while reactions in upturns are neutral. Second, fiscal rules marginally increase countercyclical policy responses in upturns, but strongly reinforce destabilizing procyclical polices in downturns. Interestingly, expenditure rules perform comparably better with regard to the stabilization objective than budget or debt rules.

IMK Grafik zur Publikationsreihe Working Paper

IMK Policy Brief 95 : The German presidency of the council and the EU social dimension

On the 1st of July, Germany will take over the rotating EU-presidency. Besides the task of exiting the crisis caused by the pandemic as swiftly as possible, a number of important dossiers need to be pushed forward. They include the European Pillar of Social Rights, action on minimum wages and incomes, backing for national short-time working and unemployment schemes, and a larger EU budget with a stronger social component.

IMK Grafik zur Publikationsreihe Policy Brief

IMK Policy Brief No. 92 : How to spend it

The Recovery Fund recently proposed by the EU Commission marks a sea-change in European integration. Yet it will not be enough to meet the challenges Europe faces. We propose a 10-year, €2 trillion investment programme focusing on public health, transport infrastructure and energy/decarbonisation. It would finance genuinely European projects so that the EU emerges stronger from the covid-19 crisis.

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IMK Working Paper No. 205 : Missing growth measurement in Germany

A novel hypothesis (due to Aghion et al.) says that imputations for disappeared products distort the officially measured price index. Using the German establishment history panel (BHP) we use the dynamic market-share approach and find an average value of about 0.5 annual percentage points of missing real growth rates, which agrees surprisingly well with the seminal literature.

Allgemeine Titelgrafik für Veröffentlichungen des IMK

IMK Study No. 66 : Why 60 and 3 percent?

The 3 and 60 percent deficit and debt caps came into the Maastricht Treaty 1992 by coincidence. There is no sound economic reasoning behind them. The Fiscal Compact (2011) has added a questionable rule for structural deficits and a problematic rule for the 7 high debt countries in the Euro area. More infrastructure investments, necessary for a Green New Deal, are restrained by the present fiscal rules.

Allgemeine Titelgrafik für Veröffentlichungen des IMK

IMK Working Paper No. 201 : Death to the Cobb-Douglas production function

A meta analysis of the literature shows that the elasticity of substitution between labor and capital is much lower (0.3) than standard models with a Cobb-Douglas production function assume (1.0) after controlling for publication bias. Labor and capital are complements, not substitutes. This also implies that monetary policy and cuts to corporate income taxes are less expansionary than standard models would predict.

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IMK Working Paper No. 200 : Preferences over wealth

A lab experiment on consumption and saving decisions, conducted with students at the University Duisburg-Essen shows that the sluggish consumption response to the currently low interest environment may be explained by precautionary motives or other preferences over wealth, which make consumers save more than a standard model would imply.

Allgemeine Titelgrafik für Veröffentlichungen des IMK

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