The KOF’s Work for the German Government as one of its Economic Experts

Assessing economic activity is worth the effort for the German Federal Government. Around 50 economists from leading economic research institutes draw up an eightypage report each spring and autumn over a period of three weeks.

This so-called community diagnosis contains a comprehensive analysis and forecast of the global, European and German economies, upon which the German government must draw when forecasting tax revenues. The Joint Diagnosis also provides assessments concerning monetary and fiscal policy along with current economic analyses.

The Joint Diagnosis has been carried out since 1950. It has become a respected institution in Germany and is associated with major prestige for the institutes involved. The results of the study are presented to the public at the federal press conference and discussed within a group of experts with representatives of the Federal Ministry of Finance and the Federal Ministry for Economic Affairs and Energy.

Until 2006, the same six German institutes were commissioned with drawing up the Joint Diagnosis. In 2007, the German Federal Government started awarding the contract to only four candidates for periods of three years. In addition, institutes from outside Germany were permitted to apply for the first time. The KOF has been participating as a junior partner of the Ifo Institute for Economic Research in Munich and represents the consortium primarily in the area of international and European economics.

In the 2016 bidding round, the consortium comprised of the ifo and the KOF was once again designated as one of the experts. This time the Ministry for Economic Affairs appointed a total of five consortia. Alongside the Ifo and the KOF, the other representatives are the German Institute for Economic Research (DIW Berlin) in conjunction with the Austrian Institute of Economic Research (WIFO), Vienna, the Halle Institute for Economic Research (IWH), the Rhineland- Westphalia Institute for Economic Research (RWI), Essen, in conjunction with the Institute for Advanced Studies (IHS), Vienna, and the Institute for the World Economy (IfW), Kiel.

ETH Zurich is regarded as a centre of expertise within German economic and political circles. The participation by the KOF in the Joint Diagnosis reinforces this perception. In addition, the intensive dialogue with economic research institutes from Germany and Austria has had positive knock-on effects for the quality of the KOF’s international economic forecasting. Since the Swiss economy is largely influenced by the international economic cycle, economic analysis for Switzerland also ultimately benefits from this.