Policy reports
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Study commissioned by the Austrian Federal Ministry of Labour and Economy.
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Study commissioned by Samsung.
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Abstract: During the COVID-19 pandemic, global value chain integration became increasingly questioned and the idea of reshoring the production gained momentum. In this contribution, we discuss the importance of free trade and value chain integration with special focus on the role of global final demand for Austria and Germany. We show that Germany and Austria are deeply integrated in global value chains and hold a relatively central position. Furthermore, roughly a third of value added of the two countries is eventually consumed or invested abroad. While the share of value added consumed or invested abroad accrues to more than 80% in some manufacturing industries, specific services industries are also deeply integrated in global value chains, most notably wholesale trade and financial services. Nevertheless, most services industries’ value added is predominantly consumed or invested domestically. Due to large economic welfare costs of reshoring global value chains, specifically because of retaliation measures as well as potential losses of comapartive advantages, the COVID-19 pandemic should not be used as a justification for a return to a more protectionist international trade regime. Thus, it is central for economic policy in Austria and Germany to support and promote the presence of their companies in international value chains by fostering their productivity and to spur the advancement of European and global economic integration.
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Study commissioned by the Austrian Federal Ministry of Digitalization and Economy.
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Study commissioned by the Austrian Federal Ministry of Finance.
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Abstract: Especially in attractive locations in metropolises such as Berlin or London or Paris rents are rising. This has sparked a debate about affordable housing and related policies. In the public debate in Germany, Austria and Vienna in particular are often cited as role models for a successful housing policy. However, while Vienna is sometimes used as an example, the current constitution and the complexity of the Austrian housing market are less well-known. Although the burden of living costs is lower than in Germany, in Austria and in Vienna rents are rising as well. Since 2005, gross rents per square meter have risen by 47% in the Austrian average. Between 2005 and 2017, in Germany, rents for existing contracts only increased by 16%. Even rents for new contracts rose with 42% less than gross rents in Austria. Gross rents in Vienna rose above average at 55%. As a result, rents in Austria and measures to cushion them are currently being discussed controversially in Austria. Rising rents in combination with a very high share of tenancies subject to some form of rent regulation do not support the effectiveness of existing policies in keeping rents in check. Hence, it is highly questionable whether Austria and Vienna should serve as role models of housing policy for Germany.
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