Current publications

Cover of EconPol Opinions

Majority Voting on Taxation Could Prove Explosive for European Integration

Friedrich Heinemann

The unanimity requirement for EU legislation on taxation in the Council has come under attack. Early this year, the European Commission launched an initiative to introduce majority voting for tax-policy decisions. Friedrich Heinemann analyses the arguments of the Commission and finds criticism unconvincing and misleading in this EconPol opinion.

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Cover of EconPol Opinions

Intra-EU labour mobility: From too little to too much?

Cinzia Alcidi and Daniel Gros

Freedom of movement of workers is one of the fundamental ‘four freedoms’ of the European Union and has been in force for decades.  Economists have long considered that labour mobility is too low in EU, but this is changing as more and more EU citizens move to other Member States to work. Cinzia Alcidi and Daniel Gros examine the factors that have driven the growth in intra-EU labour mobility in this latest EconPol opinion.

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Cover of EconPol Policy Report 14

The Surprising Sluggishness of French Exports: Reviewing Competitiveness and its Determinants

Charlotte Emlinger, Sébastien Jean, Vincent Vicard

The large deterioration in France’s current account balance during the euro’s first decade was mainly due to its poor export performances. Although there have been no more market share losses since 2012, French export growth lags behind that of our European partners. This EconPol policy report examines the continuing sluggishness of France’s trade performances over recent years, marked in particular by its surprising inability to make any significant and lasting reduction in the trade deficit or regain back lost market shares.

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Cover of EconPol Policy Brief 17

Macroprudential Measures and Taxation in the Housing Markets

Essi Eerola

The recent financial crisis and subsequent global recession have been followed by a wave of macroprudential measures in the housing market. At the same time, governments have a long tradition of conducting tax policies which encourage households to acquire owner-housing. These tax advantages may be at least partly responsible for the need to regulate borrowing. In terms of policy, the goal should be to identify instruments that reduce the negative effects of household leverage while minimizing the welfare costs to households. This EconPol policy brief examines the joint effects of the tax system and credit regulation.

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Cover of EconPol Working Paper 24

Immigration and electoral support for the far-left and the far-right

Anthony Edo, Yvonne Giesing, Jonathan Öztunc, Panu Poutvaara

Immigration increases support for far-right political candidates and reduces support for far-left candidates, with areas with low-educated non-European immigrants providing the biggest boost to the far-right. These are the conclusions of a paper released by EconPol Europe. In the paper, forthcoming in the June issue of the European Economic Review, researchers examined to what extent changes in immigration and trade patterns explain voting for far-left and far-right candidates in French presidential elections from 1988 until 2017. They control for the effects of changes in unemployment, education, and demographics.

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Cover of EconPol Policy Report 13

How to revive productivity growth?

Cecilia Jona-Lasinio, Stefano Schiavo, Klaus Weyerstrass

Providing financial incentives for companies to invest in productivity-enhancing technologies and practices is the key to productivity growth, according to this latest policy report by Cecilia Jona-Lasinio (ISTAT and LUISS Guido Carli), Stefano Schiavo (University of Trento) and Klaus Weyerstrass (Institut für Höhere Studien). Strong investment should also be made into training and workforce skills to exploit the productivity potential of new business models in the digital economy. Competition policy, although not directly related to productivity, is also emerging as an important tool to shape incentives and foster the efficient allocation of resources both across and within sectors and firms. The report analyses the recent trends in labour and total factor productivity in the EU and beyond and identifies factors that influence productivity.

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Cover of EconPol Policy Report 12

Towards more feasible sovereign debt restructurings in the euro area

Edited by Frederik Eidam and Friedrich Heinemann

Over the last year, exchanges that were initiated by the ZEW’s SEEK-conference on ‘regulating sovereign debt restructuring in the eurozone’ resulted in vivid discussions on more feasible sovereign debt restructurings in the euro area. This policy report, edited by Frederik Eidam and Friedrich Heinemann, summarizes these discussions by collecting several contributions on different aspects of the topic. Founded in different perspectives, contributors sometimes provide different conclusions, or highlight different choice options and their underlying trade-offs. However, common to all authors is the aim to increase the resilience of the European Monetary Union and to contribute on the debate on the European reform agenda.

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Cover of EconPol Policy Report 11

The design of a sovereign debt restructuring mechanism for the euro area: Choices and trade-offs

Christophe Destais, Frederik Eidam, Friedrich Heinemann

This paper critically assesses several dimensions of a sovereign debt restructuring mechanism (SDRM) for the euro area, while abstaining from recommending one ideal model for a restructuring mechanism. Instead, authors apply a menu-type approach. For five key institutional SDRM dimensions, they discuss the underlying fundamental trade-offs and the pros and cons of different design choices. The analysis implies that there is no convincing reason to further taboo the search for a euro area SDRM, as there are ways to combine the opportunities of a credible SDRM with financial stability.

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Cover of EconPol Policy Brief 16

Government debt in times of low interest rates: the case of Europe

Clemens Fuest and Daniel Gros

In this paper we discuss to what extent the declining difference between interest rates and growth rates (r-g) pointed out recently by Olivier Blanchard (2019) for the case of the US also characterizes the economic situation in Europe. We show that r-g has been positive on average but declining over the last decades in Europe as well. But r-g differs across considerably across European countries, and a continuation of current fiscal policies even under existing conditions would increase the debt ratios further in some countries. We conclude that the current low levels of r-g should be used to make progress in fiscal consolidation in countries with high debt levels. At the same time it would be desirable to benefit from the currently low interest rates to boost one time investment projects.

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