Press releases

Economic experts in major European countries are particularly critical of the US Inflation Reduction Act (IRA). This is the finding of a global survey carried out by the ifo Institute in collaboration with the Swiss Economic Policy Institute. “Misgivings are especially grave in Germany and France. Economists in the UK, Ireland, Italy, Switzerland, Austria, and Belgium are also skeptical. But their colleagues outside Europe are far more relaxed about the effects of the IRA.

Economic sanctions induce considerable economic damage in the target countries. Sanctions by the United Nations cause growth in sanctioned countries to decline by 2 percentage points annually. Extrapolated over ten years, this is equivalent to a 25 percent drop in per capita economic output. Unilateral sanctions by the US lead to an annual decline in growth of almost 1 percentage point in the countries affected. In the long term, this corresponds to a 13 percent slump in the economy’s output per capita.

Schoolchildren achieve better science grades when their teacher has specialist training in the subject they teach. This has been shown in an evaluation of international student data by Pietro Sancassani of the ifo Center for the Economics of Education. Germany was not included in the study because all science teachers there already have specialist training. Around one-fifth of the effect qualified teachers have on student performance can be ascribed to the fact that teachers feel more confident delivering the course material.

Despite Russia’s attack on Ukraine, many NATO countries are increasing their defense spending at a very slow pace. In 2023, most of them remain short of the goal of spending 2 percent of their economic output on defense. Only 11 out of 30 countries exceed this mark. “In Europe, the 2 percent target is being reached almost exclusively along NATO’s eastern border. Member countries further in the west are increasing their defense spending only cautiously,” says ifo’s military expert Marcel Schlepper.

Following the consolidation of smaller police stations in the German state of Baden-Württemberg, crime increased in the affected areas. This is the finding of a joint study conducted by the ifo Institute, EconPol Europe and the Halle Institute for Economic Research. Police station closures led to an 18 percent increase in car thefts and a 12 percent increase in residential burglaries.