Overview publications

How Sanctions Work - And Which Goals They Fail to Achieve

POLICY DEBATE OF THE HOUR

Jerg Gutmann, Matthias Neuenkirch and Florian Neumeier, Constantinos Syropoulos and Yoto V. Yotov, Eckhard Janeba, Stefan Goldbach and Volker Nitsch, Kai A. Konrad and Marcel Thum, Dario Laudati, Mohammad Reza Farzanegan

In the light of geopolitical conflicts and instability, sanctions play an important role in the international economic policy debate - especially against countries such as Russia, Iran and China. Economic sanctions are often intended to achieve foreign and security policy goals: fighting terrorism, protecting democracy and human rights, or resolving conflicts. In this issue of EconPol Forum, our authors examine, using the evidence-based studies, the extent to which various sanctions have achieved their goals. How do they affect economic growth, trade, and prosperity? In addition, we want to understand their impact on sectoral development of agriculture, energy and mining, as well as on human rights, military spending or life expectancy. In this context, international trade, financial transactions, technology transfer and other economic activities, among others, are systematically studied. And researchers look at different types of sanctions, such as unilateral, multilateral, and extraterritorial.

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Who Should Bear the Burden of Increasing Fiscal Pressure? An Optimal Income Taxation Perspective

ECONOMIC POLICY AND ITS IMPACT

Mehmet Ayaz, Lea Fricke, Clemens Fuest, Dominik Sachs

The Covid-19 pandemic has had a profound impact on the global economy, leaving us with a significant stock of additional debt. A widespread view is that the burden of servicing this debt should be distributed fairly, suggesting that tax systems should become more progressive. How should the optimal degree of income tax progression change if governments need to raise more revenues? In this article, the authors use the workhorse model of optimal income taxation to analyze the change in the degree of tax progressivity in response to the fiscal pressure caused by the Covid-19 pandemic.

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Discrimination of Sexual Minorities in Emerging Markets: Can the Needle Be Moved?

INSTITUTIONS ACROSS THE WORLD

Cevat Giray Aksoy, Christopher S. Carpenter, Ralph De Haas, Mathias Dolls, Lisa Windsteiger

Recent advances in rights for lesbians, gay men, and bisexual individuals (LGB) have varied substantially across the world. This article provides new evidence on the determinants of support for sexual minorities in Serbia, Turkey, and Ukraine – three emerging markets with some of the lowest rates of social acceptance of sexual minorities in Europe.

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Measuring Remote Work Using a Large Language Model (LLM)

BIG-DATA-BASED ECONOMIC INSIGHTS

Peter John Lambert

The Covid-19 pandemic propelled an enormous uptake in hybrid and fully remote work. Over time, it has become clear that this shift will endure long after the initial forcing event. There are few modern precedents for such an abrupt, large-scale shift in working arrangements. This article analyzes the full text of hundreds of millions of job postings in five English-speaking countries. In doing so, it applies a state-of-the-art Large Language Model (LLM) to analyze the text and determine whether the job allows remote/hybrid work.

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The Effect of Subject-Specific Teacher Qualifications on Student Science Achievement

Vera Freundl, Pietro Sancassani

What makes a good teacher? This is one of the central questions in the economics of education. General teacher qualifications, such as education level or advanced degrees, tend to be poor predictors of teacher quality. Instead, some studies have shown that subject-specific qualifications predict teacher quality better. However, the vast majority of such studies are based on data from the United States. It is therefore unclear to what extent the findings can be generalized to other nations, as teacher education programs vary widely across countries. The lack of international evidence is particularly problematic for developing economies, which would arguably benefit most from improving student achievement.

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NATO Defense Spending in 2023: Implications One Year After Russia’s Invasion of Ukraine

Florian Dorn, Niklas Potrafke, Marcel Schlepper

War is raging close to NATO's Eastern border. Russia has attacked Ukraine and threatens those states that in the past had been part of Moscow's sphere of influence. Many of them are now member states of NATO. As a collective defense alliance, this poses a threat to all NATO members. Since the ability to defend against an aggressor does not come for free, defense spending will be on the agenda at the NATO Summit in Vilnius in July 2023. NATO Secretary General Jens Stoltenberg has already expressed his expectation that all member states no longer see the 2% target as a mere ambition, but as the floor for their future defense spending. This paper presents first results for the expected defense spending of the 30 NATO members and the candidate country Sweden in 2023.

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Minimum Income Support Systems as Elements of Crisis Resilience in Europe

Werner Eichhorst, Holger Bonin, Annabelle Krause-Pilatus, Paul Marx, Mathias Dolls, Max Lay

The new Policy Report analyses the role of social policies in different European welfare states regarding minimum income protection and active inclusion. It finds consistent differences in terms of crisis resilience across countries and welfare state types. In general, Nordic and Continental European welfare states with strong upstream systems and minimum income support (MIS) show better outcomes in core socio-economic outcomes such as poverty and exclusion risks. However, labour market integration shows some dualisms in Continental Europe. The study shows that MIS holds particular importance if there are gaps in upstream systems or cases of severe and lasting crises.

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How to Reconstruct Ukraine? Challenges, Plans and the Role of the EU

POLICY DEBATE OF THE HOUR

Anna Bjerde, Romina Bandura, Anders Åslund, Marek Dabrowski, Christopher A. Hartwell and Dmytro Boyarchuk, Barry Eichengreen, Stephan von Cramon-Taubadel and Oleg Nivievskyi, Joop Adema, Yvonne Giesing, Tetyana Panchenko and Panu Poutvaara

The war in Ukraine is not over yet. Nevertheless, a possible roadmap and proposals for post-war reconstruction strategies are currently being discussed. They should be accompanied by economic and political reforms in the country. To finance this project, Ukraine will need to tap a variety of sources and institutions. This is because it will require investments in the hundreds of billions ‒ perhaps even trillions ‒ of US dollars. The EU, the US and other Western countries have signaled their willingness to provide further financial support for postwar reconstruction. Also potentially involved could be bilateral donors, multilateral banks, private investors, and the Russian state with reparations.

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The Demand for Data Skills in German Companies: Evidence from Online Job Advertisements

BIG-DATA-BASED ECONOMIC INSIGHTS

Jan Büchel, Jan Engler, Armin Mertens

The analysis shows that data skills are required in many job advertisements in Germany and are becoming more relevant. This is a positive sign for the data economy in Germany, as companies increasingly realize the potential of data and try to implement it in their own operations. However, a growing demand for employees with data skills poses challenges for companies in the future in view of the existing skills gap, especially in digitalization professions. Policymakers should intervene by, for example, taking measures that make it easier for companies to recruit foreign workers.

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The Closure of Police Stations Leads to an Increase in Theft Crime

ECONOMIC POLICY AND ITS IMPACT

Sebastian Blesse and André Diegmann

The recent literature on law enforcement activities and police presence shows that the intensity of crime can be influenced by police availability and visibility. This study is one of the first to analyze the effects of police infrastructure on crime occurrence. Attempts to cut back on police infrastructures in the area in favor of supposed efficiency gains can therefore be accompanied by considerable side effects – in the form of an increase in reported property crimes. Thus, the present results can inform policymakers and practitioners about possible unintended side effects of efficiency-oriented restructuring of administrative infrastructures. These should be considered for future plans of an efficient and future-proof reorganization of police structures.

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