Neo-liberalism has been discredited as a result of the financial crisis. But what is neo-liberalism really? Viktor J. Vanberg, Walter Eucken Institute, Freiburg, defines ordo-theory as the economic and juridical research programme of the Freiburg School and related approaches that direct attention to the control effects exerted by the legal and institutional framework conditions on economic processes. Ordo-policy is the applied branch of this research programme. Ordo-liberal economics directs its research interests to the question of how the institutional framework conditions, under which individuals act and collaborate, can be shaped such that optimal prospects prevail, enabling individuals to pursue their own goals in reciprocal, compatible freedom. For Wernhard Möschel, University of Tübingen, a market-economy order is not conceivable without some norms. Within the neo-liberal approach, room remains for supplementary and correcting policies. Heiner Flassbeck, UNCTAD, and Friederike Spiecker regard neo-liberalism "with its undifferentiated concept of reducing the state to an ordo-political minimum for the organisation of free competition in free markets" as having failed. Economic policy must be given clear priority over the speculation-prone markets. Peter Hampe, Technical University of Dresden and Munich University for Political Science, examines the history of neo-liberalism and explains the difference between neo- and paleo-liberalism. Hans-Werner Sinn explains the position of neo-liberalism with a football analogy: good players and a ball in themselves are no guarantee for a successful match. For the game to be fair and not to end up in chaos, rules must apply and a referee must ensure that these rules are followed.
Stefan Drews
For some time, survey results have indicated a slight improvement in firms' access to credit. Indicators such as the equity situation of the firms and the banks or also the credit default rates in the banks' books do not clearly show, however, that the effects of the financial and economic crisis have been overcome. Stefan Drews, Federal Ministry of Economics and Technology, explains this apparently paradoxical result in that many companies in the early stages of the present economic recovery are only now encountering financial difficulties. He stresses that in the now necessary discussion on winding down of the crisis-combating measures that an all-clear signal on the financing side should not be given too early or hastily. Not until 2011 will we know for sure whether the initial stabilisation trends are robust enough so that sufficient capital will be available for the majority of German firms also in the coming months.
Wolfgang Ochel and Anja Rohwer
It is useful to know whether the institutional rules of individual countries display characteristics with which a high per capita income can be achieved. Such an appraisal can be made with the institutional index that has been developed by the Ifo Institute together with Theo Eicher of the University of Washington, Seattle. The index provides a means of measuring the quality of a country's institutions. For 2009 the changes in the index run parallel to the changes in per-capita income in the OECD countries. This means that the mean of institutional indicators, with their time delays, are good predictors of economic growth in the OECD countries. Responsible for the rise in the institutional index and hence also for the growth of OECD countries as a whole were above all an increase in human capital, labour-market reforms and structural adjustments in government spending.
André Kunkel
At the end of April 2010 bank lending policies loosened for the fourth time in succession according to the Ifo Business Survey: in German trade and industry, only 36.1% of the firms reported restrictive lending policies. Nevertheless, the firms' situation is still not satisfactory. One third of the firms still report difficulties in attaining credit and only 6 percent are satisfied with the lending situation.
Christian Breuer
The 136th meeting of the Working Group on Tax Revenue Estimates again revised downwards its estimate of tax revenue. Tax reductions are ruled out in light of the tight budgetary situation. Price-adjusted tax revenue over the entire forecast period up to 2014 will remain below the levels of 2007 and 2008. The aggregate tax ratio will fall into the year 2011 and will remain at a relatively low level also in the medium term.
Marc Gronwald, Janina Ketterer and Jana Lippelt
This article examines primary energy consumption in 2007 using two parameters. Energy consumption is examined in comparison to countries' GDP and per capita energy consumption.
Klaus Abberger
The Ifo Business Climate for German industry and trade improved again strongly in April. The firms are considerably more satisfied with their current business situation, this component now having risen significantly for the second month in succession. The firms are also more optimistic regarding the six-month business outlook than they were in March. The Ifo Employment Barometer also clearly rose in April. The outlook on the labour market in Germany has improved.
In English published as: Results of the April 2010 Ifo Business Survey (Summary) (PDF, ca. 250 kb).
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