The Institute's central area of research is the international division of labor from a static and dynamic point of view. The Institute analyzes the sectoral and spatial allocation of goods, services, and factors of production. The endowments of countries, including the environment, the changes of these endowments over time, and the international interdependencies between monetary and fiscal policies and between business cycles of various countries are investigated. In analyzing these phenomena, special emphasis is given to the consideration of institutional settings in national as well as international terms and to the incentive and political economy systems that are part of these settings. In particular, the transition from the industrial economy to a service and information economy, with its implications for employment and institutional settings on the labor market, are analyzed.
Special emphasis is laid upon the impact of European integration.
Research activities in the Environmental and Resource Economics Department focus on the allocation of environmental and natural resources. The factors influencing the increasing scarcity of natural resources are investigated and their impact on the allocation of factors of production and goods in the world economy is assessed. Natural resources encompass energy resources, nonenergy raw materials, environmental quality, and biological diversity. Both the intertemporal aspects of increasing scarcity and the allocation of scarce natural resources are the subject of research activities in the Department. National as well as international aspects of environmental policy and allocative as well as distributional effects are analyzed and efficient and rational policy instruments are developed.