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Long-term effects of privatisation in eastern Germany: award-winning US economist begins large-scale research project at the IWH
The Halle Institute for Economic Research (IWH), the coordinating institution for MICROPROD project, is hosting the winner of the Max Planck-Humboldt Research Award 2019. Ufuk Akcigit, Professor of Economics at the University of Chicago, receives the award for his exceptional scientific achieve-ments and outstanding potential. Under Akcigit’s leadership, a new research group at the IWH will use innovative methods to investigate why economic disparity still exists between eastern and western Germany 30 years after the fall of the Berlin Wall. Donated by the German Federal Ministry of Education and Research, the prize endowed with €1.5 million is considered one of the most prestigious awards in the German scientific community. Every year, it is jointly awarded by the Max Planck Society and the Alexander von Humboldt Foundation to a foreign researcher who then works in Germany for a certain period of time. The award ceremony will take place on 5 November 2019 in Berlin.
At the IWH, Ufuk Akcigit will have access to a unique database as well as decades of expertise in transformation research. He is planning three research projects, the first of which is both the most extensive and controversial. Using new, comprehensive data from companies and their managers, the privatisation of former GDR businesses by the Treuhandanstalt will be investigated. To what extent did the qualifications of the selected managers or their networking with other decision-makers play a role? Using a benchmark model, Akcigit aims to ascertain how eastern German firms would be performing today if exclusively the most talented entrepreneurs had been put in charge. In doing so, he will use an innovative approach that combines theory, empirics and computer simulations. Akcigit uses data at a micro level (firms, individuals, patents, ideas) in order to answer central macroeconomic questions with the help of a model estimation. This allows him to translate the microeconomic decisions of individuals into macroeconomic results, something considered one of the hardest tasks in Economics.
The second research project will analyse why highly innovative firms are established less frequently in eastern than in western Germany. In this context, it will also examine the role of migrants in economic growth and knowledge creation in Germany. Finally, the third research project will look for reasons for the slowing productivity growth in Europe using the IWH’s CompNet data.
On the awardee. Ufuk Akcigit’s work at IWH will build on his previous, internationally acclaimed research. The 39-year-old has already published an impressive dozen studies in the world’s top five journals on a wide range of fundamental economic questions. This is also reflected in several prestigious research awards and citations in leading global media. Akcigit studied Economics at Koç University in Istanbul and received his PhD from the Massachusetts Institute of Technology (MIT) in 2009. He was appointed tenured Professor of Economics at the University of Chicago this July.
The full press release can be accessed here.
MICROPROD’s 1st policy dialogue will take place in early December in Brussels, and will be hosted by Bruegel. During this lunch event, first MICROPROD results will be presented to the policy makers. The Consortium looks forward to discussing the advancement of the research and to receiving some valuable feedback from various stakeholders.
The MICROPROD consortium held its kick-off meeting on 5th-6th February 2019. During this 2-day event the partners got the opportunity to get to know each other, to present the plan of work for their respective work-packages, to elect the governing bodies of the consortium and to agree to the overall internal organisation of the project.