ifo Center for Macroeconomics and Surveys

Macroeconomic Research

To provide a scientific basis for macroeconomic analysis and forecasting, theoretical and empirical macroeconomic models are continuously reviewed and refined. In addition, innovations in the field of forecasting methodology are incorporated and expanded upon. Finally, the quality of the surveys is ensured through our own work in survey methodology.

Macroeconomic research primarily investigates the causes and economic impact of macroeconomic disruptions, and derives their implications for applied business cycle analysis. Many questions arise from experiences and observations related to recent economic crises. As far as methods are concerned, both model theory approaches, such as dynamic stochastic general equilibrium models (DSGE), and empirical time series methods, such as vector autoregressive models (VAR), are used. The empirical work also frequently draws on survey data from the ifo Institute. The microdata from the ifo Business Survey is used, for example, to identify production constraints and corporate uncertainty at the company level and to examine how companies respond to various external influences (such as the coronavirus pandemic or Russia's invasion of Ukraine) in terms of their production, investment, pricing, and hiring behavior.

In the field of forecasting methodology, research focuses, against the background of the vast amounts of data available to the forecasters (also as a result of their own surveys), on methods to condense and select information. For example, investigations are carried out to determine whether microdata from companies and surveys is suitable for forecasting macroeconomic time series. In addition, alternative aggregation methods for microdata on participants, sectors and regional delimitations are examined. 

In addition, models with mixed frequencies, which are already in constant use, are examined for their suitability and further developed.

Microdata Analyses

In addition to the use of traditional macroeconomic models, one focus is on the analysis of microdata, for which the effects to be examined are identified at company level. The issue usually centers on how companies adjust their expectations in response to macroeconomic shocks or economic policy interventions, and how these adjustments affect their pricing, employment and investment decisions. The microdata of the ifo Institute’s business surveys are used to a large extent – both the regular questionnaire and special questions integrated into the surveys for research purposes or additional special surveys that have been conducted. In these, text responses to open questions are also increasingly used. In collaboration with the ifo-LMU Economics and Business Data Center (EBDC), the survey data is also combined with external datasets such as administrative data or balance sheet data.

ifo Business Climate

The central service tasks of the Center are, on the one hand, the collection, processing and interpretation of microdata and, on the other, the survey-based analysis and forecasting of economic development in Germany, the European Union and other important countries. The “ifo Business Climate”, Germany’s leading early economic indicator, based on around 9,500 monthly reports from companies, is of particular interest to the public. HR departments are also asked about personnel and labor market issues in the HR survey.

ifo Business Climate

Business Surveys  

The business surveys are a central service function of the ifo Institute. The regularly collected data is not only incorporated into the ifo Economic Forecast but also forms an important basis for sector-specific and macroeconomic projections by companies, associations and government agencies. The survey results are discussed and interpreted in detail in the media. In economic research, analyses of microdata from the ifo surveys play a major role in examining economic behavioral patterns, for example, investment and employment behavior, employment trends or pricing policy. The ifo Institute’s excellent reputation in the field of business surveys is also confirmed by the fact that its survey technique is now used in more than 50 countries.

Survey Results 

Economic Experts Survey (EES)

The Economic Experts Survey (EES) is a quarterly survey of economic experts worldwide.The EES captures their assessment of the current economic policy and political performance as well as of special questions in their countries. 

Economic Experts Survey (EES)

Economic Forecasts 

Four times a year, the Center produces a comprehensive macroeconomic forecast for Germany, the European Union, and other important countries in the global economy. In spring and fall, it participates in the Joint Economic Forecast commissioned by the Federal Ministry for Economic Affairs and Energy, together with the Austrian Institute of Economic Research (WIFO) in Vienna. Following each Joint Economic Forecast, the Center sends a member of staff to the Tax Estimation Working Group, whose tax revenue forecasts are an important component of the German government's fiscal projections.

The economic forecasts are based on ongoing observation and analysis of economic developments, paying particular attention to the survey results of the ifo Institute. Building on this basis, a host of empirical models are used. To estimate and forecast the current economic situation (current and following quarter), approaches are typically used that condense the information from readily available indicators and translate it into forecasts. Examples include bridge equations and vector autoregressive models, whose forecast values are averaged using Bayesian methods, as well as mixed-frequency models. Since 2020, the results of a forecasting procedure developed by the Center (ifoCAST) have been regularly made available to the public on the ifo Institute's website. For forecasts with a longer time horizon, structural models are used in addition to more atheoretical time series methods. In recent years, for example, the Center has developed and applied the ifo DSGE model for Germany. It depicts the German economy as part of the eurozone within a microeconomically based structural multi-country model. In addition to its use for forecasting, this model has also already been used several times for policy simulations.

Economic Forecasts
ifoCAST

Prof. Dr. Benjamin Born, Professor of Economics, University of Bonn

Prof. Dr. Isabel Gödl-Hanisch, Assistant Professor in Economics at LMU Munich

Prof. Dr. Manuel Menkhoff, Assistant Professor in Economics at the University of Copenhagen

Prof. Dr. Maik Wolters, Professor of Economics, Christian-Albrechts-University Kiel Institute of Economics

Prof. Dr. Rüdiger Bachmann, University of Michigan

Prof. Dr. Almut Balleer, RWI – Leibniz Institute for Economic Research

Prof. Dr. Kai Carstensen, Christian-Albrecht-University of Kiel 

Professor Georg Dürnecker, Ph.D., Goethe University Frankfurt

Prof. Dr. Gernot Müller, University of Tübingen  

Prof. Dr. Christopher Roth, University of Cologne

Prof. Dr. Jan-Egbert Sturm, ETH Zurich  

Prof. Michael Weber, Ph.D., The University of Chicago

Prof. Johannes Wohlfart, Ph.D., University of Cologne

Dr. Florian Dorn, MdB

Philipp Heil, HEC Paris

CESifo Area on Macro with Micro Data