If you are old enough, you will probably remember where you were on September 11, 2001. As they learned from the terrorist attack on the New York World Trade Center, maybe what they felt. The pictures burned into collective memory. The images also know younger people. They mark the beginning of the 21st century – and the end of an era of relative certainty.
The symbolism was breathtaking. The USA,, the apparently indomitable megamacht, were attacked on their own territory. And the two high -rise towers, the iconic center of American capitalism, did not stand, but fell together and let thousands of people fall into death.
The new millennium had started so hopeful. The world had become democratic in large parts. Dictatorships disappeared, borders opened. New technologies – from internet to biotech – promised enormous growth in prosperity. There was talk of a “New Economy”, a new type of productivity, a triumphal march of individual freedom, prosperity and peace.
is a professor of economic policy journalism at the Technical University of Dortmund. Previously, the doctoral student worked as a vice editor of the manager magazine. Müller is the author of numerous books on economic and monetary policy issues. For the manager magazine, he gives a pointed view of the most important business events every week and writes the column “magical square”.
In retrospect, the then oversized expectations appear hopelessly naive. Further disturbing events followed. America and its allies waged wars, initially in Afghanistan, then in Iraq. Conflicts that could not be won and led to headless withdrawals many years later.
American financial capitalism then collapsed seven years and four days after the attacks of September 11th. And without being necessary to an attack from the outside. The investment bank Lehman Brothers went down and tore large parts of the western financial system with it. The 2008/09 crisis triggered the deepest international recession since World War II. The West, it could seem, was lazy and rotten inside. The economic near -death event of the financial crisis seemed to underline the symbolic collapse of the Twin Towers afterwards.
Events and developments that are now material for the history books. I remember them at this point because they exclude themselves like a quiet prelude to today’s global crisis crescendo. Large and increasing uncertainty has become a constant companion. You get used to it. Only in retrospect does it become clear how drastically the world has changed. So where do we stand today?
Strike
We are currently experiencing the second largest uncertainty shock since the turn of the millennium. Only the outbreak of Covid-19 including the following Lockdowns and border closings 2020 was even more serious, such as the update of the uncertainty indicator for Germany shows that our Dortmund research center Docma calculates. Even more, we are in an extraordinary period: Pandemie, UkraineKlieg, inflation, a long phase of domestic -political instability, as it has not yet existed since the Federal Republic was founded, Donald Trump’s election (78) and the trade war he started – it goes in a strike. The past five years have been more turbulent than anything we have experienced for generations.
Comparable Indicators
show a similar pattern for the USA, Great Britain or China. While the previously globalized world is conflicting into previously unclear power and spheres of power, all nations share an outrageous unpredictability that tends to have a negative impact on the economy.
Uncertainty hinders companies in investments, consumers for larger purchases and state institutions to react appropriately. At the spring meeting of International Monetary Fund (IMF) and World Bank In the upcoming week this will be one of the central issues. (Pay particular attention to the new IMF reports on the world economy and the stability of the financial system.)
Robust Germany
Unlike similar key figures, our UncertaAnty Perception Indicator (UPI) enables dismantling into the different sources of uncertainty. This is a big advantage: how a shock affects the overall economy depends in particular on the direction from which it comes. In cooperation with colleagues from the Essen Economic Research Institute RWI, we recently demonstrated that the macroeconomic consequences are very different (see also this memo,, if you are interested in details, you will find the corresponding study here
).
So it happens that the uncertainty shocks mentioned at the beginning had comparatively weak negative effects on the German economy. The 2008 financial crisis also quickly passed us. The same applies to the euro crisis in the early 2010s and to the populist double strike in 2016 (Brexit referendum and the first choice of Donald Trump to the US president). At that time, the German economy proved to be surprisingly robust towards Schocks who came from the outside. And this time?
The customs hammer-half as bad?
According to our indicator, the current German situation is particularly shaped by three developments:
Firstly, the uncertainty that emanates from the geopolitical situation reached the highest value in March that we have ever measured.
Trumps erratic act with the Customs hammer On the one hand, export -oriented German industry hits the market. On the other hand, this reveals the end of the US-shaped international order. Rules and institutions that have been considered set since the end of the Second World War erode at a breathtaking pace.
It is only like this: Our analyzes show that geopolitical faults – so far – have had rather low influence on the German economy. Sure, it doesn’t have to stay that way, but the effects of geopolitical uncertainty are not statistically significant for the past quarter of a century.
Second, social uncertainty in Germany is great. And this factor actually has significantly negative effects on economic development.
Over long periods, the Federal Republic was a haven of reliability: the country was quiet and rigid. This changed from 2016 when the large number of immigrants and the associated strengthening of the AfD determined the domestic debates in the 2017 federal election. Later, the pandemic and the associated clashes about Lockdowns, mask and vaccination obligation drove this time series to maximum values. The war in the Ukraine, Dispute over the upgrade and fundamental questions regarding the load -bearing capacity of the democratic social order in the event of zero growth and corresponding Distribution conflicts caused excitement in the past few years.
Our analyzes are currently showing that terms such as democracy, order, trust, security, responsibility, climate change, migration determine the debates.
Thirdly, as far as German politics are concerned in the narrower sense, the Federal Republic has long been ruled extremely stable. Despite the burgeoning populism, there were technocratic majorities, supported by cooperative parties in the federal and state governments. Only the corona crisis ended this state of permanent stability.
Since then, national politics has no longer returned to the usual calm. On the one hand, this is due to the extraordinary combination of problems, for which there are no solutions in the drawers, and on the other hand, but also due to the dubious performance of the traffic light coalition. A relative maximum achieved domestic uncertainty than that Federal Constitutional Court At the end of 2023 the legality of the use of the side households (“special funds”) questioned. Headless savings rounds followed, violent protests, arguments for little things, finally the break of the coalition. The fact that all of this took place in front of the backdrop of a darkened geopolitical scenario should have worsened.
Low domestic uncertainty is a positive signal
Our data series ends in March 2025. The large financial policy changes-abolition of the debt brake for defense spending, creation of a 500-billion euro special fund for the infrastructure-, the Union, SPD and Greens have dared before the end of the legislative period. A surprising U -turn that shows up in a small rash of the corresponding time series. However, the end of the coalition negotiations is no longer taken into account.
The recently low domestic uncertainty can be seen as a positive signal. This is by far the most important factor that our model holds ready. Nothing has more direct influence on economic development.
Black and red coalitions have ruled this country without much excitement for many years, not ambitious, but calculable. Germany and Europe may have remained well below their possibilities. Merkelsche was calm.
The current new edition with new faces now obviously creates more trust than uncertainty. To what extent this is reflected in the companies will be shown. (Pay attention to new moods from the IFO Institute on Thursday.)
After all, the alleged future Chancellor Friedrich Merz (66) has taken note of the radically changed geo- and European policy necessities and drawn conclusions. You can see that as a signal: this is not a mere continued. This is a government that has understood what to do now. Is that enough? Especially when it comes to growth and employment, the coalition remains behind the necessities.
The event chains of the past decades have impressively showed that not only decisions have long -term consequences, but also omissions.
The most important economic dates of the coming week
Tuesday
Report season I – business figures from SAP, Tesla, Lockheed Martin, Norththrop Grumman, Halliburton, Verizon, Ge.
Washington – global economic alarm – spring meeting of IMF and World Bank, which continues all week. Tuesday IMF experts present the two most important analysis works World Economic Outlook and Global Financial Stability Report. Trump’s shadow darkens both – economy and financial stability.
Wednesday
Reporting season II – business figures from Just Eat, Akzo Nobel, Essilorluxottica, Danone, Kering, Volvo, Reckitt Benckiser, IBM, Boeing, AT&T, whirlpool,
Thursday
Berlin – shortly before the curtain falls – the outgoing Minister of Economic Affairs Robert Habeck presents the spring project of the executive federal government.
Munich-Lust, Last, mood-The IFO Institute publishes new figures from the IFO business climate index for the month of April.
Reporting season III – Schaeffler business figures, Delivery Hero, Carrefour, Michelin, Accor, Nokia, Saint-Gobain, Thales, Air Liquide, Dassault, Sanofi, Orange, Eni, BNP Paribas, Nestlé, Anglo American, Unilever, Roche, Kühne & Nagel, Intel, Procter & Gamble, Merck & Co., Southwest Airlines, Dow, Bristol Myers Squibb, Pepsico, T-Mobile US.
Friday
Leverkusen – explosive mood – Annual General Meeting of BayerGroup. The takeover of the American agro giant Monsanto under the former CEO has proven to be a disaster.
Reporting season IV – business figures from Südzucker, Nordex, Saab, Holcim, Abbvie.