EconPol Working Paper Series

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 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 Working Paper 6 2017

Addressing the Core-Periphery Imbalances in Europe: Resource Misallocation and Expansionary Fiscal Policies

Luigi Bonatti and Andrea Fracasso

How can the euro area tackle its perennial problems of core/periphery imbalances and anaemic long-term growth? According to network members Luigi Bonatti and Andrea Fracasso, Università di Trento, there is no quick-fix solution. Temporary fiscal stimulus does not produce permanent improvements, while the upfront costs and short-term negative impact of structural reforms can feed distributional conflicts. Permanent cross-national transfers provide local relief, but also exacerbate tensions among member states. The authors advocate a nuanced approach focused on the key role of structural differences in affecting income and growth differentials, as well as competitive imbalances across the euro area.

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Cover EconPol Working Paper 5 2017

We need more Europe in the Monetary Union. Which Europe? Hints from policy games.

Luciano Andreozzi and Roberto Tamborini

Under the pressure of the 2008 crisis serious flaws have emerged in the design of the European Economic and Monetary Union (EMU) as a supranational architecture which aims at generating and distributing  collective benefits from integration among highly interdependent countries. If we agree that more Europe is needed, we shall urgently ask "Which Europe?" Economists Luciano Andreozzi and Roberto Tamborini from EconPol network partner Università di Trento introduced an interesting policy game setup of two interdependent countries where each sovereign government seeks to optimise its own welfare function reflecting social preferences over policy options and their outcomes. Read here why the strategy of further integration by an extended system of binding rules enforced by technocratic agencies may be unsuccessful and which consequences should be drawn.

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