Current publications

Illustration EconPol Opinion Series

Trade Wars in a ‘Winner-takes-all’ Economy

Daniel Gros

Trump’s trade follies have attracted the attention of policy makers and markets across the world. This is only natural given that the US has switched from being a major underwriter of the global multilateral trading system to its number one enemy. But dramatic changes like this rarely happen without some deeper undercurrent that enables erratic politicians to overturn long-established structures and mechanisms. A closer look at the key issue between the US and China reveals that today’s ‘trade war’ is taking place in a different economic framework than in the past.

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Cover EconPol Policy Report 5/2018

The Effects of Immigration in Developed Countries: Insights from Recent Economic Research

Anthony Edo, Lionel Ragot, Hillel Rapoport, Sulin Sardoschau and Andreas Steinmayr

How does migration impact the labour market, public finance and the political landscape? In EconPol’s latest policy report network members Anthony Edo, Lionel Ragot, Hillel Rapoport, Sulin Sardoschau and Andreas Steinmayr, CEPII, show that immigration can create winners and losers in the host country’s native workforce by affecting the skill composition of receiving economies and changing wage dispersion. But cultural concerns emerge as the key driver of scepticism towards immigration. A deeper understanding of these concerns is a precondition for designing policies that foster a positive atmosphere and combat negative attitudes towards immigrants and extreme voting.

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Cover EconPol Policy Brief 6 2018

Long Run Consequences of a Capital Market Union in the European Union

Thomas Davoine

What are the potential advantages and drawbacks of proposals to create a Capital Market Union in the EU? This Policy Brief discusses the long-term implications of perfectly integrated capital markets, ignoring crises but taking population aging into account. Recent research shows that redistribution would take place, from fast aging to slow aging countries, because investors seek access to the largest labour markets that deliver the highest returns on their investments. In some countries like Austria social security reforms like raising the retirement age would play a crucial role in maximizing the benefits of CMU, or minimizing related losses.

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Cover EconPol Working Paper 9 2018

Population Aging and Cross-Country Redistribution in Integrated Capital Markets

Thomas Davoine

How can the European Union tackle its aging populations? Network member Thomas Avoine, IHS, investigates international spillovers due to capital market integration when populations age and the cross-country redistribution that this generates. Using a multi-country overlapping-generations model, he finds that labour supply drops more in rapidly aging countries, pushing up the capital-labour ratio, lowering returns on investment and generating capital flows towards countries with younger populations. The author looks at how governments can reform tax and pension policy to influence redistribution patterns and how rapidly aging countries can promote immigration to mitigate the negative redistributive effects of capital market integration.

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Cover EconPol Working Paper 8 2018

Global Implications of U.S. Tax Reform

Jack Mintz

What will be the impact of the latest US tax reform adopted on 1 January 2018? In this EconPol Working Paper Jack Mintz, President’s Fellow, School of Public Policy, University of Calgary, looks at the key features of the US Tax Cuts and Jobs Act, assesses its implications for global growth and speculates on how other countries are likely to respond to this ground-breaking reform.

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Cover EconPol Policy Brief 05/2018

EU Budget Reforms: Where Can Europe Really Add Value?

Christoph Harendt, Friedrich Heinemann and Stefani Weiss

The debate over the next EU budget is already heating up. In early May the European Commission will publish its proposal for the Multiannual Financial Framework (MFF) for the years 2021-2027. Agricultural subsidies and regional transfers are likely to continue to swallow a large share of the EU budget. In view of the acute legitimacy crisis facing the EU, this spending structure calls for reform. The Commission has recommended using “European added value” (EAV) as a reform criterion. This policy brief considers whether allocating competences more effectively between the EU and its member states could boost the EU’s performance.

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Cover: EEAG Report 2018

EEAG Report on the European Economy 2018: What Now, With Whom, Where To - The Future of the EU

Torben Andersen, Giuseppe Bertola, John Driffill, Clemens Fuest, Harold James, Jan-Egburt Sturn and Branko Urosevic

As the EU attempts to progress along its path of ever closer union and bold enlargement, the European Economic Advisory Group (EEAG) report 2018 focuses on the symptoms of and possible cures for the current integration malaise. It highlights the role of trust in allowing national and supranational organisations to function; reviews the role of admission criteria and governance rules, and considers economic convergences and public policies across EU states.

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Cover EconPol Working Paper 7 2017

Dynamic Scoring of Tax Reforms in the European Union

Salvador Barrios, Mathias Dolls, Anamaria Mafei, Andreas Peichl, Sara Riscado, Janos Varga and Christian Wittneben

Dynamic scoring, or the evaluation of tax reform effects, is common practice in the US, but has never been applied to the EU’s fiscal governance framework. Adopting a novel approach, the authors analyse hypothetical reforms of the social insurance contributions system in Belgium. They find that the self-financing effect of a reduction in employers’ social insurance contributions is far greater than that of a comparable reduction in employees’ social insurance contributions.

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Cover EconPol Opinion blanco 2018

A Trumpian Turn in EU Trade Politics and the Silence of Germany

Gabriel Felbermayr

On December 5, 2017, the European institutions - Commission, Council, and Parliament - reached political agreement on reforming the EU’s trade defense instruments. This “modernization” of anti-dumping legislation is, in fact, an attempt to provide the EU with stronger tools to tackle the allegedly “unfair” practices of its trade partners. On its website, the Commission advertises that the deal will enable the EU to impose higher duties on dumped products. Does Germany’s position signal a new and worrying stance toward free trade?

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Sustainable Fiscal Policy Calls for More Restrictive Debt Rules for Eurozone

Sustainable Fiscal Policy Calls for More Restrictive Debt Rules for Eurozone

Clemens Fuest

In view of loud complaints over alleged austerity policy in Europe, the call for tougher debt ceilings seems untimely. It is claimed that the current rules are too restrictive and will hamper public investment. The next German federal government's position on reforming European Monetary Union is one of the main issues on the table in the coalition negotiations and it is highly controversial. ifo President Clemens Fuest is convinced that a serious application of the existing concepts for ensuring sustainable fiscal policy would call for stricter, not softer debt rules. This Opinion explains why Europe needs stricter debt rules and should not follow in Japan’s footsteps.

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