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The damages caused to individuals and businesses by the outbreak of the COVID-19 pandemic are so vast that it will be almost impossible to make an accurate estimate of them. However, if those who contributed to such destruction can be called to account for it, by way of civil liability, the injured parties will obtain justice, and the damaging economic consequences will fall on those responsible. Instead, if internalizing the damage proves impossible, the deadweight loss will remain in the hands of entirely blameless victims.

N26, Celonis and Biontech are the most recent success stories of the German start-up scene. All three enterprises have collected higher sums of venture capital in the past year. As good as this news may be, however, the overall picture of the German venture capital scene is rather problematic. Young German enterprises receive comparatively little risk capital.

In a new IREF Working Paper, David Stadelmann (Bayreuth University and IREF) and his co-authors discuss how the corona epidemic can be made less burdensome. They focus on the role of those who are immune after recovering from the illness and do not pose any health risks to others. The authors point to corona immunity as a resource that should be searched, found, produced, certified, and finally employed to ease the way out of the lockdown.

The literature has put forward two main arguments to explain the recent rise of populist parties and their electoral success. On the one hand, commentators have highlighted the rising level of uncertainty about the economy and grievances among the losers in global markets. Resentment, it is argued, has been susceptible to the anti-establishment message of populist movements and parties that blames ‘Them’ for taking away from “Us” prosperity, job opportunities, and public services from ‘Us’. On the other hand, authors have emphasised the role of culture and the backlash against long-term shifts in progressive and liberal social values. Such cultural backlash is especially strong among the older generation and less educated people, who suffer the displacement of familiar traditional norms and the rapid cultural changes that seem to be eroding the basic values and customs of Western societies. Other external shocks – such as the massive recent increase in immigration – are related to both explanations. Immigrants ‘compete’ against native low-wage, unskilled workers, and at the same time bring with them new values and behaviours that may be source of tensions with the residents in the destination countries.

Online shopping is increasingly popular. According to a survey from 2019, almost 90 percent of 25- to 44-year-olds had ordered something online during the previous three months. Even half of those aged 65 or more confessed they shopped online. However, online shopping is also criticised for damaging the climate. The Süddeutsche Zeitung, for instance, demands higher postage to protect the climate from the increasing number of parcels that need shipping due to online shopping. Die Welt also considers the possibility of raising postage charges to fight climate change. The article claims that online returns in Germany cause as many daily CO2 emissions as 2,200 cars driving from Hamburg to Moscow. So, do we have to feel bad whenever we order shoes, smartphones or diapers online? Studies have assessed the effects of online trading. They conclude that online orders do usually not cause more greenhouse gas emissions than bricks-and-mortar trade. Yet, there is potential for improvement.

When they introduced the euro, European governments were expecting that the new currency would rival the dollar on international markets. Twenty years later, the euro is still far behind on that account. A recent paper by Ethan Ilzetzki, Carmen M. Reinhart and Kenneth S. Rogoff (Why is the Euro punching below its weight?, NBER Working Paper No. 26760, February 2020) investigates this issue, and shows that the advent of the European currency did little more than consolidating the pre-existing franc and deutsche mark zones.

The recent decision of the German Bundestag against the introduction of an opt out solution for organ donation has surprised many people. After all, the two leading health politicians of the coalition, CDU Health Minister Jens Spahn and SPD Health politician Karl Lauterbach, had publicly supported the opt out solution. In the vote on organ donation, however, the usual party discipline did not apply.

According to Article 38 of the German Constitution, the members of parliament “… are not bound to orders and instructions and are only subject to their conscience.” In practice, however, before a decision is made in the Bundestag, votes are taken in the respective parliamentary groups, and MPs usually follow this result. Parliamentary group discipline is also laid down in coalition agreements.

What influences the voting behaviour of members of parliament? Do they follow their own preferences, the party’s line, the whispers of interest groups or do they listen to their voters? In the latest IREF Working Paper, David Stadelmann of the University of Bayreuth and Gustavo Torrens of Indiana University examine the question of how strong the influence of different groups on political decisions is, exploiting unique data from Switzerland

Recently, a new “specter” has been haunting Europe: populist parties (left or right, here we have the full menu) appear to gain more and more approval at the polls. In some cases, they also manage to win the elections and enter the cabinet. From Hungary to Poland, Spain, Italy (and, according to some observers, the UK as well) we are spoiled for choice. Yet, observers sometimes fail to notice that the very existence of ideologically radical governments, as often cabinets involving populist parties are (such parties are usually rather extreme from an ideological point of view), can also have a significant impact on citizens’ happiness.

Climate scientists warn against the possible consequences of anthropogenic climate change. Rising average temperatures make extreme weather, including draughts and floods, more likely; rising sea levels threaten populations in coastal regions. An international political agreement was to limit global warming to an average of 2°C until 2100; this was tightened to 1.5°C at the Climate Change Conference in Paris. It is questionable, however, whether the climate targets will be met. Considering today’s prospects, it is about time to not only cut emissions but to also discuss ways of dealing with the consequences of climate change.

Beyond emissions trading systems, markets play an important role in this regard: they can make it significantly easier to adapt to climate change. Price signals hint at necessary adjustments, international trade opportunities make changes in production structures less painful, developed financial markets help handling risk. Moreover, market economies promote prosperity, which facilitates the use of resources and technology in an effort to cope with the effects of climate change.

A new type of virus is holding the world in suspense by evoking images of the worst Hollywoodian nightmares. It is known that it spread out of Wuhan, the capital of Hubei province, China, and then quickly propagated throughout mainland China, at least for the moment. The mortality rate of this new type of coronavirus is reported to be at about 2%. This esteem might be however highly imprecise. First, because the real number of people infected is not known. Some independent institutions presume that it could be much higher than the statistics reported by the official authorities. Second, because it needs time for the mortality rate to approach its steady state value, as most people are still ill, and it is not possible to know exactly how many of them will recover.