Business Cycle and Growth
Growth research deals with the question which factors influence the long-term development of countries. Business cycle research, on the other hand, attempts to understand the causes of short- to medium-term deviations from the long-term growth trend and to forecast the likely further development in the short-run (typically 1-2 years).
Traditionally, the gross domestic product (GDP), i.e. the sum of goods and services produced expressed in values, represents the central indicator of prosperity in economics. Economists have always been concerned with the question of which factors promote or inhibit economic growth in order to develop economic policies To be able to draw conclusions about how the long-term prosperity of economies can be secured or improved. In its research activities, the HWWI deals with the determinants of economic growth and explicitly includes further concepts of measuring social prosperity, such as life satisfaction, in its considerations.
Economies typically do not develop linearly along their long-term growth path. Rather, in all economies there are short- to medium-term fluctuations in economic activity to observe the growth path, the so-called business cycles. Economic fluctuations are often associated with frictions such as unemployment and inflation and create an inefficient use of economic resources. In today’s highly globalized world with complex international supply chains, there is a strong international economic context. Because of the strong international interdependence of financial, raw material and goods markets, this connection is particularly pronounced in times of financial crises, wars or pandemics. The HWWI researches the international economic context and analyzes its likely consequences for the German economy. In this context, the HWWI regularly forecasts the German economic development and also prepares a regional economic forecast for Hamburg. For this purpose, the HWWI uses the results of the quarterly economic survey of member companies provided by the Hamburg Chamber of Commerce. The survey data is also used to analyze the development of individual industries or types of companies. The HWWI pays particular attention to medium-sized companies where ownership and management lie in one hand.
As part of its economic and growth research, the HWWI also deals intensively with the development of the prices of a wide range of raw materials. The focus of the analyzes is the HWWI raw material price index, in which the world market prices of the most important products from all sub-segments of raw materials trading are recorded and condensed into a meaningful index using an objective weighting methodology. The weekly recalculation based on the latest data ensures that the information is up-to-date and generates high-frequency time series for differentiated trend and volatility analyses.
Employees
Publications
Projects
Postbank Wohnatlas 2026
In an annual report, the HWWI compiles the Postbank Wohnatlas, which shows results for the local real estate markets at the level of the 400 German districts and independent cities. The development of regional purchase and rental prices, the ratios of purchase prices to net rents as well as the…
Postbank Wohnatlas 2025
In an annual report, the HWWI compiles the Postbank Wohnatlas, which shows results for the local real estate markets at the level of the 400 German districts and independent cities. The development of regional purchase and rental prices, the ratios of purchase prices to net rents as well as the…
Events
HWWI at the annual conference of the Verein für Socialpolitik in Berlin
Striking evidence: The impact of railway strikes on competition from intercity bus services in Germany
Prof. Dr. Alexander Sandkamp
Extreme weather shocks, economic resilience, and the role of local financial structure
Vinzenz Peters, M.Sc.
Press Releases
New HWWI-forecast
After a good start to this year for the German economy, the outlook for growth and inflation has deteriorated significantly since the end of February due to the Iran war, in particular the closure of the Strait of Hormuz and the associated increase in energy prices. The closure of the Strait of Hormuz is now lasting longer than initially expected. The erratic US tariff policy is also noticeably dampening German export activities. However, the mood in the economy has also been affected by home-grown problems, especially because the reform process is progressing slowly and has been overshadowed by disagreements within the coalition government. The further development of the Iran conflict is unclear, and the upcoming reforms harbor potential for conflict. Even if the Strait of Hormuz will soon become passable again and oil and gas prices will fall, the increase in energy prices will continue to have an impact for some time. And the subdued mood among investors and consumers is likely to cause restraint for the time being. Only government consumer spending and fiscal programs for infrastructure and defense provide impetus. Under these conditions, the German economy is likely to grow by just under 3/4% this year. In 2027, with an end to the Iran war and a more consistent reform policy, real gross domestic product could grow by 1 1/4%.
New HWWI Forecast
The German economy had stabilised towards the end of last year; many economic indicators developed positively. The growth opportunities for 2026 and 2027 were assessed favourably due to the fiscal spending programmes and support measures launched by the coalition government. However, with the Iran war and the resulting price shocks for oil and gas, the prospects for inflation and growth – not only in Germany, but worldwide – have initially deteriorated. The further development of the Iran conflict is unclear – here it is assumed that the war will be limited to the territory of Iran by the middle of the year at the latest and that the Strait of Hormuz will be freely passable again. Oil and gas prices would then move back towards pre-war levels. The recovery of the German economy, scheduled for 2026/2027, could then “pick up speed” again in the second half of this year. Under these conditions, the HWWI expects average annual economic growth of 3/4% for 2026 (before the outbreak of war: 1 1/2%) and one of 1 1/2% for 2027.
New HWWI Forecast
The German economy stagnated overall in the 1st half of 2025; German gross domestic product fell by 0.3% in the second quarter, as it had risen in the first quarter. Special effects (bringing forward production and exports to the first quarter due to expected US tariffs and mild winter weather) played a role in this, and the new government only took up its work in May and the economy initially waited for its reform plans. After the coalition parties had already greatly expanded the debt possibilities for the infrastructure and defence sectors before the government took office, it has now also introduced the first measures to improve the location conditions. This should ease the previous reluctance of investors and provide growth impetus in the future. Private consumption has been supporting the economy for some time. However, further dampening influences come from the export side, because despite the “tariff deal” with the USA, tariffs on US exports are now higher than in the pre-Trump era. Overall, however, the positive impulses will outweigh the negative impulses in the future, so that a gradual revival of the economy is to be expected for the rest of this year, which will then continue to intensify next year. The HWWI continues to expect economic growth of 1/4 % on average for 2025 and 1 1/2 % for 2026.