EconPol Policy Reports

Cover of EconPol Policy Report 6

Which Role for a European Minister of Economy and Finance in a European Fiscal Union?

Zareh Asatryan, Xavier Debrun, Annika Havlik, Friedrich Heinemann, Martin G. Kocher and Roberto Tamborini

The European Commission has proposed to inaugurate a European Minister of Economy and Finance with the broad purpose of streamlining the complex and fragmented decision-making processes within the European Monetary Union. This policy report discusses the potential role the Minister could play in the development of the European Fiscal Union. The report lays out the main challenges along the current institutional solutions facing several dimensions of the Fiscal Union, in particular related to fiscal sustainability, macroeconomic shocks, incentives of structural reforms, and the optimum provision of European public goods. The report then discusses whether and to what degree the new European Minister of Economy and Finance can provide appropriate solutions to these challenges for the Fiscal Union.

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Cover of EconPol Policy Report 7

On the EU-US Current Account

Gabriel Felbermayr and Martin Braml

The first part of this short report uses the newest available data from the Bureau of Economic Analysis (BEA), an agency of the US Department of Commerce, to analyse economic relations between the US and the EU. The data is used to decompose the components of the US current account balance, and to analyse the bilateral balance of payments with the European Union, the Euro Zone and Germany. In the second part, we use data provided by Eurostat to mirror US figures. We find  enormous discrepancies between what the EU and the US report, particularly with respect to primary income.

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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 Report 4/2017

Economic Effects of Brexit on the European Economy

Gabriel Felbermayr, Clemens Fuest, Jasmin Groeschl and Daniel Stöhlker

On 29 March 2017, the UK Government notified its exit to the EU in accordance with Article 50 of the EU Treaty.1 Brexit is therefore officially initiated. On 29 April, the Heads of State and Government of the European Council adopted the guidelines for negotiations between the EU and the UK in accordance with Article 50 TEU. Negotiations between the EU27 and the UK on the important issues of exit and discussions on future political and economic relations between the EU27 and the UK have begun in July 2017 and have proven difficult since then.

 

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Cover EconPol Policy Report 3/2017

The Nature of Shocks in the Eurozone and Their Absorption Channels

Cinzia Alcidi, Mathias Dolls, Clemens Fuest, Carla Krolage and Florian Neumeier

We investigate the degree of (a)symmetry of macroeconomic fluctuations within the euro area (EA). Our findings indicate, first, a high degree of co-movement of cyclical GDP across EA member states. However, the amplitudes of national business cycles appear to vary notably, meaning that booms and recessions differ with regard to their severity across EA member states. Second, the co-movement of cyclical unemployment is somewhat less pronounced than that of cyclical GDP and the sensitivity to common shocks is even more heterogeneous, suggesting that differences in labour market conditions play an important role with regard to the vulnerability to common shocks. Turning to potential stabilization mechanisms, we find that in general, the private sector has a huge potential to absorb asymmetric shocks. However, in international comparison, the shock-absorption capacity of the private sector in the EA is rather weak. Recent evidence suggests that promoting capital market integration may improve the private sector’s shock absorption capacity.

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