This contribution is motivated by two stylized observations, the slowdown in growth, and a simultaneous income polarization in many advanced economies. While mainstream neoclassical and endogenous growth theory cannot sufficiently explain the nexus, we argue that the demand side plays a role. We...

Drawing on panel data from six elections between 1998 and 2017 in Germany, we estimate the causal effect of immigration – described by Germany’s interior minister as the "mother of all political problems" – on electoral support for the far right and the far left. Our identification...

The effects of inequality on economic growth depend on several factors. On one hand, they depend on the time horizon considered, on the initial level of income and on its initial distribution. But, on the other hand, as growth and inequality are also uneven across space, it also seems relevant...

The upward sloping trend of rents and house prices has initiated a debate on the consequences of surging housing costs for wealth inequality and welfare. We employ a frictionless two-sectoral macroeconomic model with a housing sector to investigate the dynamics of wealth inequality and the...

This paper analyses whether the severe demographic change in Germany causes its high current account surpluses. An ageing population both increases the supply and lowers demand of capital in an economy. Due to a longer life span individuals save more. Fewer workers reduce the optimal capital...