Current publications

Cover of EconPol opinion

One Europe, One Future

António Afonso, ISEG (EconPol Europe; Lisbon School of Economics and Management, Universidade de Lisboa)

In the current context of difficult times across Europe and in the World, there are relevant issues on which many people might agree, regardless of their political, ideological or theoretical views. António Afonso examines the options available and asks for compromise.

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Cover of EconPol Policy Brief 23

Portugal’s GDP, a Note on the 2020 Unknowns

António Afonso (EconPol Europe, Lisbon School of Economics and Management of the Universidade de Lisboa)

António Afonso (EconPol Europe, Lisbon School of Economics and Management of the Universidade de Lisboa) has estimated the real growth rate of GDP in Portugal in 2020 and predicts a budget deficit of around 3% or 4% of GDP, implying a break and not a fiscal regime switch. Of particular relevance, he says, is private consumption and investment, with households cutting spending significantly and an increase in government spending necessary to cover the lack of domestic demand.

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Cover of policy brief 22

Wage Rigidities and Old-Age Unemployment

Martin Kerndler (TU Wien), Michael Reiter (IHS Vienna, NYU Abu Dhabi, EconPol Europe)

Wage smoothing is beneficial for firms and workers, but wage rigidities can lead to bilaterally inefficient separations. By comparing the impact of four policy measures regarding their impact on welfare, output and government expenditures, Martin Kerndler (TU Wien) and Michael Reiter (IHS Vienna, NYU Abu Dhabi, EconPol Europe) have identified a reasonable policy mix to counter the negative employment effects of wage rigidities. 

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How Corporate Debt Burdens Threaten the Economic Recovery After COVID-19 and Why Planning for Debt Restructuring Should Start Now

Bo Becker (Stockholm School of Economics, CEPR & ECGI), Ulrich Hege (EconPol Europe, Toulouse School of Economics, ECGI), Pierre Mella-Barral (Toulouse Business School)

EconPol Europe's Ulrich Hege (Toulouse School of Economics, ECGI) and co-authors Bo Becker (Stockholm School of Economics, CEPR & ECGI) and Pierre Mella-Barral (Toulouse Business School) discuss the economic risks of COVID-19 and the increasingly plausible steep protraction, examine the mitigating support programs governments are putting into place for households and firms, and explain why planning for debt structuring should start now.

This article first appeared on

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Cover of EconPol Policy Brief 21

The Economic Costs of the Coronavirus Shutdown for Germany: A Scenario Calculation

Florian Dorn, Clemens Fuest, Marcell Göttert, Carla Krolage, Stefan Lautenbacher, Sebastian Link, Andreas Peichl, Magnus Reif, Stefan Sauer, Marc Stöckli, Klaus Wohlrabe, Timo Wollmershäuser

This EconPol policy brief, using figures from the ifo Institute, calculates potential costs of coronavirus to the German economy of up to 729 billion, with up to 1.8 million jobs cut and six million workers affected by lower hours - however it stresses that the aim of any action must be to shorten the partial shutdown of the economy without compromising the fight against the epidemic, with strategies that combine a resumption of production with further containment of the epidemic.

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Cover of EconPol Opinion

This Time is Different

Daniel Gros (EconPol Europe; Director, CEPS)

A recession is now inevitable, says Daniel Gros (CEPS, EconPol Europe), but it can be followed by a vigorous recovery. The memory of the financial crisis of 2008/9 is fresh enough to ensure the combined efforts of central bankers and governments can keep financial markets working and prevent mass bankruptcies. Policymakers at every level are using every lever at their disposal to avoid a repeat of the freezing of financial markets, which was so damaging ten years ago. The lesson was learned and is now being applied at a vast scale throughout Europe and the US. Containing the virus and protecting public health is where Western societies have to learn and adapt quickly.

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Cover of EconPol policy report 20

Supporting Firm Innovation and R&D: What is the Optimal Policy Mix?

İrem Güçeri (EconPol Europe, Oxford University), Marko Köthenbürger (EconPol Europe, ETH Zurich), Martin Simmler (EconPol Europe, Oxford University)

Existing literature suggests that firm R&D support policies stimulate private R&D within a country and that in most cases, the positive impact of government support is stronger on smaller firms. Recent evidence also indicates that some of the policy instruments, such as patent box policies, are tools that multinationals use to lower their total tax bill through profit shifting. In this policy report, İrem Güçeri (EconPol Europe, Oxford University), Marko Köthenbürger (EconPol Europe, ETH Zurich) and Martin Simmler (EconPol Europe, Oxford University) find that the most prevalent support policies are effective in fostering private enterprise sector R&D and small and young firms seem to benefit the most from both public R&D and R&D tax incentives.

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Challenges of Negotiating a Free Trade Agreement Between the UK and the EU

Clemens Fuest

EconPol Speaker Clemens Fuest has called for the UK Government to abandon its plan to complete the Brexit transition by the end of 2020. Prof Fuest describes the UK’s decision to rule out a customs union and pursue its own trade policy as ‘regrettable’, highlights fears from both the UK and EU over the potential lack of a “level playing field”, calls tax policy “a minefield of disagreement” and says climate policy “poses a further challenge to the free trade agreement.”

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Cover EEAG Report on the European Economy 2020

EEAG Report on the European Economy 2020: Fair Taxation in a Mobile World

Torben M Andersen, Giuseppe Bertola, Clemens Fuest, Cecilia García-Peñalosa, Harold James, Jan-Egbert Sturm, Branko Uroševic

In the 1930s, countries fought destructive trade conflicts – now we have a similar situation, but the conflicts are taking place in the tax system. These conflicts arise out of the twin impacts of globalization and digitalization. Once upon a time, there was an implicit understanding of fairness in taxation, meaning how countries tax within their borders and how the tax burden is distributed. More specifically, companies and individuals were taxed based on their residence and consumption in the destination country. Such an approach worked while these events were mostly perceived as national. However, the world has changed, and in an increasingly globalized, digitalized, and mobile world, these understandings no longer appear to work smoothly, efficiently, and uncontentiously.

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Cover of EconPol Working Paper 44

Markups in a Dual Labor Market: The Case of the Netherlands

Gerrit Hugo van Heuvelen, Leon Bettendorf, Gerdien Meijerink (EconPol Europe, CPB Netherlands Bureau for Economic Policy Analysis)

An expanding body of research finds a sharp increase in the average markups in the US and Europe, driven by firms located at the top of the markup distribution; other studies find that markups in the US and Europe have increased only moderately or even remained stable. These differing results have triggered a discussion on methodology, a key issue being the choice of the free input in the production function approach. Authors Gerrit Hugo van Heuvelen, Leon Bettendor and Gerdien Meijerink (EconPol Europe, CPB Netherlands Bureau for Economic Policy Analysis) show that the choice of the free input is crucial, and may explain at least some of the discrepancies in the findings in the recent literature. They illustrate this with the case of the Netherlands, which has a large share of flexible work arrangements and temporary labor contracts as well as fixed contracts.

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