Prof. Almut Balleer on the Subject of "Fossil Inflation"

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27/05/2022
 

Prof. Almut Balleer, head of the Chair of Applied Economics, made the following comment about climate protection and energy on Westdeutscher Rundfunk (WDR): "We don't have green inflation; we have fossil inflation. The prices of goods that we want to get rid of have to rise".

The price of electricity from fossil fuels will also rise - but it will also be more realistic, according to economist Almut Balleer. This is because negative effects, such as environmental damage, are not yet reflected in the prices - although these costs need to be taken into account.

You can find out more here on the WDR website.

 

Prof. Almut Balleer in RTL Aktuell and on ntv Talking About Potential Impacts of Wage Indexation

In Luxembourg and Belgium, the development of wages and pensions is automatically indexed to the inflation rate. This kind of adjusting to the average increases in the cost of living initially protects consumers against a loss of inflation-induced buying power.

Prof. Almut Balleer of the Chair of Applied Economics spoke in RTL Aktuell and on ntv about potential risks of this kind of procedure, e.g. endangering the competitiveness of individual firms, or a further fueling of inflation on account of a wage-price spiral if higher wage costs are passed on to the customers.

Here you will find links to the videos in RTL Aktuell (viewable at about minute 10:00) and on n-tv.

 

Prof. Almut Balleer on March 10, 2022 commenting on the impact of rising energy prices

Energy prices have been rising sharply for the last few weeks, most recently also due to the war in Ukraine. As a result, social inequality is increasing, as especially low-income sections of the population suffer under rising prices. This so-called energy poverty affects around eleven percent of the population in Germany.

Prof. Almut Balleer from the Chair of Applied Economics comments on the problem of rising energy prices in an article published by WDR. It is expected that prices will rise still further. To alleviate energy poverty, Prof. Balleer proposes transfer payments to relieve low-income households.

Click here to read the whole article.

 

Prof. Almut Balleer as Expert Guest in NDR Radio Program

In light of her expertise, NDR Radio invited Professor Almut Balleer, head of the Chair of Applied Economics, was invited to take part in their radio program "Redezeit" on the topic of "Milliarden gegen die Krise" (Billions Spent on Combatting the Crisis).

During the program, expert studio guests put forward their arguments and elucidated on the relevant background information and inter-relationships. Radio listeners were also able to participate in the discussion. The program, which was broadcast on September 3 and addressed the topic of "billions spent on combatting the crisis", included questions such as whether the financial aid measures for firms and employees are targeting effectively, whether the financial aid is being provided in the correct "dosage", to what extent the public debt might increase further, and which generation will ultimately have to pay off this debt.

Prof. Balleer came to the conclusion that it was correct of the German government to have responded quickly and generously in order to tackle the crisis. Since a part of the public debt is being spent on investments, future generations will profit from these in the sense of generational justice.

Other guests were Dr. Jens Boysen-Hogrefe, economics expert from the Kiel Institute for the World Economy, and Kai Teute, deputy federal chairperson of the association "die jungen Unternehmer" (young entrepreneurs).

The entire program is available as a podcast here.

 

Prof. Almut Balleer on Damage to the German Economy Caused by COVID-19

In an article published on August 25, 2020 by the Süddeutsche Zeitung newspaper, Prof. Almut Balleer, head of the School's Chair of Applied Economics, talked about the damage that the COVID-19 pandemic has caused to date for Germany's GDP:

The belief that the pandemic will have seriously affected the German economy has now been officially confirmed by economic data from the country's Federal Statistical Office. In the second quarter of 2020, the economic downturn of 9.7 percent is the highest ever since the end of World War II. But measures of the social state, such as the "Kurzarbeit" scheme [similar to UK's "furlough"] have significantly softened the blow to the economy that the pandemic has dealt. According to Almut Balleer, whose research focuses on macroeconomics, applied econometrics, and labor economics, "A large increase in unemployment particularly at this time would pose a great threat to the German economy". Similarly to many other economists, Prof. Balleer is in favor of the current measures "even if some jobs are being temporarily artificially supported".

The latest economic indicators suggest a certain economic recovery. As Prof. Balleer says, "The decisive factor is how quickly the economy will recover, since the pandemic is slowing down consumer demand as well as the possibility of firms to offer their products (e.g. on account of disrupted supply chains). The data from various studies sugest that the drop in demand has exceeded the initial supply shock, according to Prof. Balleer. "In Germany the domestic demand is our biggest problem at the moment".

In the case of a demand shock, many economists recommend that the government should intervene and generate the missing demand. This did occur in Germany in the form of a stimulus package. In Prof. Balleer's opinion, "That was the right decision at the time". However, the timing of implementation for government measures like this is crucial. "In light of an impending second wave - with all its related negative economic consequences, the billions of Euros could be gone in a puff of smoke", says Almut Balleer, because then the demand which has been strongly pushed by the government would encounter a new supply shock.

Policy makers, researchers, and firms will find out at the end of October whether the stimulus package has worked. The Federal Statistical Office will then be releasing its first estimation of the economic performance in the third quarter of 2020.

You can read the whole article in German here.