Hamburg Institute of International Economics (HWWI)

Traditionally, the gross domestic product (GDP), i.e. the sum of produced goods and services expressed in monetary values, represents a central prosperity indicator of national economies in economics. Economists have always been concerned with the question of which factors favour or inhibit economic growth, in order to be able to draw economic policy conclusions on how the long-term prosperity of national economies can be secured or improved. The HWWI's research activities focus on the determinants of economic growth, and explicitly include broader concepts of measuring societal prosperity, such as life satisfaction, in its considerations.

Economies typically do not develop linearly along their long-term growth path. Rather, in all economies, short to medium-term fluctuations in economic activity around the growth path can be observed, so-called business cycles. Business cycle fluctuations are often associated with frictions such as unemployment and inflation, which generate an inefficient use of economic resources. In today's highly globalised world with its complex international supply chains, there is a pronounced international business cycle. Due to the strong international interdependence of financial, commodity and goods markets, this link is particularly evident in times of financial crisis, wars or indeed pandemics. The HWWI researches the international business cycle and analyses its probable consequences for the German economy. In this context, the HWWI regularly forecasts German economic development and also prepares a regional economic forecast for Hamburg. For this purpose, the HWWI uses the results of the quarterly business survey of member companies provided by the Hamburg Chamber of Commerce. The survey data is also used to analyse the development of individual sectors or types of companies. The HWWI pays particular attention to medium-sized enterprises, where ownership and management are generally in one hand.

In the course of its economic and growth research, the HWWI also deals intensively with the development of the prices of various commodities. At the centre of the analyses is the HWWI Commodity Price Index, in which the world market prices of the most important products from all sub-segments of commodity trade are recorded and condensed into a meaningful index with the help of an objective weighting methodology. The weekly recalculation on the basis of the latest data ensures that the information is up-to-date and generates high-frequency time series data for differentiated trend and volatility analyses.

Our publications

Over the course of industrialisation and the resulting economic growth, the environment became increasingly affected and this continues to the present day. For a long time, little emphasis was placed on environmentally sound production processes and consumption. The main reason for this is the occurrence of external effects, where the producer or consumer of a good does not have to bear all (if any of) the economic consequences of his actions. If, for example, wastewater can be discharged into public waters or exhaust gas into the air, the polluters save on cleaning or disposal costs and as a result, excessive environmentally damaging behaviours occur. The overexploitation of the earth's environmental resources is becoming increasingly visible. Moreover, according to overwhelmingly unanimous opinion, the production techniques and consumption habits used have contributed significantly to the ongoing process of global warming, and will probably continue to do so in the future.

Against this background, the HWWI is conducting intensive research in the field of environmental and climate economics. The aim is to show how economic instruments can be used to reconcile economic activity and the environment, and to internalise external effects appropriately. Since many environmental goods cross borders, these analyses must necessarily be carried out in an international context.

The HWWI is particularly intensively involved with climate-economic issues. Research is conducted on how climate change affects the prosperity and subjective well-being of societies, the attitudes of the population towards climate protection and climate policy, and which climate policy measures seem suitable for limiting global warming. Particular attention is paid to the question of how climate-related extreme weather events (such as droughts, floods or storms), which now occur with greater frequency or intensity in the wake of climate change, influence economic activity, and how negative effects can be prevented or at least limited.

Our publications

Over the course of industrialisation and the resulting economic growth, the environment became increasingly affected and this continues to the present day. For a long time, little emphasis was placed on environmentally sound production processes and consumption. The main reason for this is the occurrence of external effects, where the producer or consumer of a good does not have to bear all (if any of) the economic consequences of his actions. If, for example, wastewater can be discharged into public waters or exhaust gas into the air, the polluters save on cleaning or disposal costs and as a result, excessive environmentally damaging behaviours occur. The overexploitation of the earth's environmental resources is becoming increasingly visible. Moreover, according to overwhelmingly unanimous opinion, the production techniques and consumption habits used have contributed significantly to the ongoing process of global warming, and will probably continue to do so in the future.

Against this background, the HWWI is conducting intensive research in the field of environmental and climate economics. The aim is to show how economic instruments can be used to reconcile economic activity and the environment, and to internalise external effects appropriately. Since many environmental goods cross borders, these analyses must necessarily be carried out in an international context.

The HWWI is particularly intensively involved with climate-economic issues. Research is conducted on how climate change affects the prosperity and subjective well-being of societies, the attitudes of the population towards climate protection and climate policy, and which climate policy measures seem suitable for limiting global warming. Particular attention is paid to the question of how climate-related extreme weather events (such as droughts, floods or storms), which now occur with greater frequency or intensity in the wake of climate change, influence economic activity, and how negative effects can be prevented or at least limited.

Our publications

Spatial factors play a significant role in many economic issues. For example, how intensively two regions trade with each other will depend, among other things, on how far apart they are, as this has an effect on transport costs. Geographical factors such as topography can also play a role in the level of transport costs. But spatial factors do not only play a role in foreign trade. The distance to the destination, for example, often plays a role in migration decisions as well, since greater distances are often accompanied by greater cultural differences. Companies evaluate locations not only according to the conditions at the location itself, but also take into account the conditions in the immediately surrounding area, for example against the background of attracting suitable personnel who may have to commute. And the effects of research institutions also often radiate into the surrounding area.

The HWWI sees itself as a specialist in the presentation and analysis of spatial data. On the one hand, the classic methods of spatial econometrics are used, which typically involve data from official statistics at the level of regional authorities. In the course of growing digitalisation, even very small-scale geo-referenced data are often available today, which mostly come from remote sensing (for example aerial photographs, satellite images, radar) or from mobile end-devices with GPS signals. Today, survey data is also often geo-referenced. The HWWI uses all these data sources to make spatial analyses possible, taking advantage of the modern methods of econometrics and machine learning.

Our publications