Improving Methods for Policy Analysis of Foreign Trade and Investment
It is of crucial importance that economic policies related to trade and investment are based on a solid understanding of the mechanisms through which enhanced internationalization of German firms affect the domestic economy.
Against this backdrop, this projectpursues four goals. First, it aims at taking stock of the relevant micro-data that are provided and maintained by the statistical offices on both the federal and the state level (DESTATIS) and by the central bank (Deutsche Bundesbank) and examining whether these data may – after suitable adjustment (merging, linking) – be used for model-based quantitative policy analysis in the areas of trade and foreign investment. Secondly, taking the new quantitative trade theory as a point of departure, it aims at developing and empirically implementing simulation models for trade and investment that allow for firm heterogeneity and dynamic adjustment. Thirdly, such models will be used to address, by means of numerical simulations, various policy scenarios regarding international trade and investment. These simulations will focus on heterogeneous effects among German firms. And finally, the project involves econometric estimation, using novel micro-panel-data, aimed at shedding light on topical issues related to trade and investment.
IAW is particularly concerned with the first and second project objectives.
Recent papers:
Fauth, M., B. Jung and W. Kohler, German Firms in International Trade: Evidence from Recent Transaction-level Data, accepted for presentation at the European Trade Study Group (ETSG) 2021 Ghent.
September 9-11, 2021: 22nd Annual Conference of the European Trade Study Group (ETSG), Ghent
German Firms in International Trade: Evidence from Recent Transaction-level Data
Matthias Fauth [IAW], Prof. Dr. Benjamin Jung [Universität Hohenheim], Prof. Dr. Wilhelm Kohler [IAW]
June 19, 2019: 6th Bundesbank-IAW Lecture on European Economic Integration, Tübingen
The Euro Crisis: Why did it happen and can it happen again?
Prof. Dr. Karolina Ekholm [Stockholm University]
June 4, 2018: 5th Bundesbank-IAW Lecture on European Integration
Europe’s Global Linkages and the Impact of the Financial Crisis: Policies for Sustainable Trade, Capital Flows, and Migration
One research output which evolved within the framework of this project has recently attracted wide interest of the Spanish media.
The study The Great Trade Collapse and the Spanish Export Miracle by Peter Eppinger (University of Tübingen), Nicole Meythaler (IAW Tübingen), Marc-Manuel Sindlinger (University of Bonn) and Marcel Smolka (University of Aarhus, Denmark) uses detailed firm level data to analyse the surprisingly positive development of exports within the Spanish manufacturing industry in the years since the global financial crisis of 2008: While the number of Spanish Exporters and Importers did not diminish due to the crisis, exporting firms even increased their international activity to compensate for the weak domestic demand. The study shows that, compared to domestic firms, exporters proved to be more robust to the crisis, they shrank their workforce less and could maintain their productivity level.
Thus, in contrary to popular belief, the Spanish economy did extremely well on international markets and outperformed not only other European countries in economic downturn (such as Italy), but also countries with a much more robust economic performance (such as Germany).
Further information and publications related to the project are available at www.iaw.edu/glic.
Led by the IAW, the project brings together leading researchers from six countries and three continents. The VW foundation supports this project within its program “Europe and Global Challenges”.
German Firms in International Trade: Evidence from Recent Microdata
Journal of Economics and Statistics, July 2023, https://www.degruyter.com/document/doi/10.1515/jbnst-2022-0040/html
The Economic Consequences of the US Tariff War: A Quantitative Perspective
In: J. Klenk, F. Waschek (eds.). Chinas Rolle in einer neuen Weltordnung. Tectum, 2021, 111-138, https://www.nomos-shop.de/titel/chinas-rolle-in-einer-neuen-weltordnung-id-97867/