Team
The people behind the ifo Institute offer the very high level of expertise and experience needed to fulfill our research and service mandate.
Globalization
Globalization, or the continually increasing integration of the worldwide goods, labour and capital markets, presents great opportunities, but also comes with many perils. Appropriate economic policy framework conditions are required at a national and international level for the opportunities to lead to real benefits in terms of prosperity. Economists have always extolled the advantages of free trade.
Pension
The aging of society poses major challenges for the statutory pension system in Germany in the coming decades. By the mid-2030s, the baby boomer generation will have gradually retired. What do these shifts mean for the statutory pension insurance system? What measures must be taken to make financing the system sustainable?
Education Comparisons
Students in some countries perform much better on international achievement tests than students in other countries. Is this all due to socioeconomic and cultural differences, or do school systems make a difference? Our research based on the micro data of international student tests such as PISA and TIMSS suggests that school systems are indeed very important.
Gender Economics
The debate on gender equality has many facets. From an economic perspective, participation in the labor market is an important factor for economic growth.
Artificial Intelligence (AI)
It collects data, analyzes it, and can provide doctors with more precise information on the best possible patient care. It ensures driving safety in the road traffic of tomorrow. It helps decide whether we get the loan or not. Artificial intelligence (AI): the technology of the future is finding its way into work and everyday life. It is supposed to make our lives easier. However, it also harbors risks in areas including control, data protection, and job losses.
Free Trade
Free trade leads to all countries producing exactly those goods for which they have comparative advantages; i.e., producing them with less resource input than other goods. It thus increases people’s consumption options compared to a situation without trade (autarky). In the longer term, specialization through trade also allows for stronger productivity growth.
The Energy Crisis
The price of electricity is rising, gas is becoming scarce, climate change is advancing: the current crises and geopolitical changes pose major challenges for energy policy. Do policymakers have to choose between securing the energy supply and protecting the climate? Should they keep nuclear power plants online longer than originally planned? Do we continue to plan for natural gas as a bridge technology? We need to speed up the expansion of renewables, increase energy efficiency, and expand infrastructures. Our focus is on bringing together insights on how to solve the acute crisis and shape the energy markets of the future.
Eastern Germany
30 years after the reunification a positive balance can be drawn. The economic “reconstruction of the East” has largely been completed. Driven by politics and supported by private investment, productivity and wages have risen sharply in the new Länder over the past 30 years.
Economic Policy Agenda 2021–2025
The starting position of Germany’s first post-Merkel government is not an easy one. Even before the coronavirus crisis, there were considerable challenges ahead. What should the next federal government’s economic and financial policies focus on?
Systems Competition
The third type of inter-system competition involves Western democracies competing with authoritarian forms of state capitalism that can be found in China, but also, in slightly different forms, in Russia and other smaller states like Vietnam.
Vocational Education 4.0
The digital transformation is a key technological trend that will change the world of labor in the future. Our research shows that people with a vocational education run the risk of losing their jobs later in life when demand for their occupation-specific skills fades over time due to technical and structural change. This creates a trade-off between early employment advantages and later employment risks for educational programs that train for work in a specific job which is particularly pronounced in apprenticeship countries.
Municipal Politics
Municipal politics has a direct influence on the economic and social life of local citizens. Cities, municipalities, and districts are therefore of central importance when it comes to structural change, demographic development, and competition between locations. At the same time, municipalities in Germany are facing major challenges: scarce public funds, the modernization and digitalization of local government, persistent structural weakness, and a growing gap in demographic development between urban and rural areas.
Digital Tax
They earn billions in the EU – but pay hardly any taxes: this is the accusation against internet giants like Apple, Google, and Facebook. A number of initiatives aim to hold them more accountable. Under the current system, a foreign business’s profits are taxed where that business has a permanent physical presence, what is known as a permanent establishment. In addition to the tax on profits, there is also sales tax, which is levied where a business generates its sales. Of course, these rules also apply to companies with digital business models.
Basic Security System
The German tax and transfer system is frequently criticized for being hostile to growth and incentives. International organizations such as the OECD regularly criticize the fact that people on low and moderate incomes in Germany have to shoulder too high a tax burden. Academic studies point out the problems in designing rules applicable to low incomes: The incentive to earn more is often wiped out by rules on how much of the additional gross income goes toward reducing the Hartz IV benefits and other benefits received. Currently, Hartz IV recipients are allowed to earn 100 euros per month without it having any impact on their benefit. People in marginal part-time employment, however, have very little financial incentive to increase their gross income. If they earn an additional 100 euros, they only get to keep 20 euros of it. In some areas a person's net income does not increase at all with the additional income they earn, and in other areas it even decreases.
Public Debt
As a result of the global financial crisis, debt levels in European economies have risen significantly: in the EU27, debt rose from 65.0 to 80.5 percent of GDP between 2008 and 2010, and to 86.6 percent by 2014. In the context of this rising public debt, some smaller and heavily indebted countries in Europe have come under increasing strain. In France, for example, public debt has since remained constant at over 95 percent, in Italy at over 130 percent, and in Greece at more than 180 percent of GDP.
War in Ukraine
The Russian invasion of Ukraine is not only a military and geopolitical turning point. It is also changing the economic situation. This affects both the short-term economic trend and the medium-term prospects for growth and prosperity.
Equality of Opportunity
The topic of inequality in society is increasingly the focus of public debates. Apart from inequality of income and wealth, the topic also refers to missing equality of opportunity, which arises particularly in the education system. In fact, the association between educational achievement and socioeconomic background is particularly strong in Germany, indicating limited equality of opportunity for children from different social backgrounds.
Demography
As the population ages, there are fewer and fewer young people to finance pensions. A declining number of working-age people are generating the revenue that the welfare state uses to provide benefits. Companies must align their human resources policies with demographic change. In the long term, municipalities will also be forced to realign their services: if the population grows, they will have to build day-care centers and schools; if the population shrinks, they will have to make downward adjustments to public administration and infrastructure. It is precisely because demographic processes proceed so slowly that the socio-political challenges they bring tend to fade into the background. However, the earlier the facts and available options are brought to the table, the sooner such diverse change can be managed.
Coronavirus
The coronavirus crisis began in China in late 2019 and has caused major health and economic damage worldwide. In the affected countries, it triggered both a supply shock and a demand shock, thus giving rise to the essential difficulty in the economic management of the coronavirus.
Digital Infrastructure
Successful creation of powerful digital infrastructure is critical to the future viability and competitiveness of the European Economic Area. The internet – in close connection with other forms of information technology – has by now become firmly established in today’s manufacturing industry under the heading “Industry 4.0.” German industry is in a good position to begin utilizing the potential of data-driven business models in the Internet of Things.