The second Fiscal Policy Seminar took place on 7-8 October 2019 at the Federal Ministry of Finance: 65 science and policy experts from twelve countries attended the seminar, titled “Analysing developments in savings, investments and interest rates – reassessing the role of fiscal policies for growth and stabilisation”. They analysed the developments of savings, investments and interest and discussed conclusions on how to implement fair fiscal policies.

This year’s edition of the annual seminar primarily focused on how government expenditure affects the overall economy and the solvency of the general government. The participants further discussed how people and businesses understand economic interdependencies and how they adapt their expectations to political changes. They also analysed the reasons for the high level of savings prevalent in the business sectors of industrialised countries.

A call for papers was disseminated prior to the seminar, and the most outstanding of these contributions was awarded a prize of €5,000 at the event. This year’s prize went to co-authors Thorsten Klug, Eric Mayer (both of the University of Würzburg) and Tobias Schuler (European Central Bank). The researchers found that the high level of savings in the German business sector can be attributed to the competitive pressure on wages as a result of globalisation, the precautions undertaken by businesses in response to the financial crisis and the high demand for quality products around the world (the presentation can be found here). Moreover, they discovered that the savings of German companies have been a major contributor to the German current account surplus.

An independent scientific committee chaired by Andreas Peichl (ifo Institute, University of Munich) reviewed the papers.