News Archive

Euro coins

Fiscal Consolidation and Automatic Stabilization: New Results

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Working Paper
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The share of income shocks absorbed by the tax and transfer system in the Eurozone declined from 48 percent in 2008 to 24 percent in 2011: for some of the countries most affected by the crisis, the stabilization effect was even negative in some years of the crisis, implying that the tax and transfer system amplified income shocks.

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Map made up of people

Self-selection and Motivations of Emigrants from a Welfare State

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EconPol Policy Report
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This report analyzes self-selection and motivations of emigrants from Denmark, one of the richest and most redistributive welfare states in the world. Authors Ilpo Kauppinen (EconPol Europe, VATT Institute for Economic Research), Till Nikolka (EconPol Europe, ifo Institute, LMU Munich) and Panu Poutvaara (EconPol Europe, ifo Institute, LMU Munich) present evidence on how migrants are self-selected with respect to their education, earnings, and unobservable abilities, measured by residual earnings.

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Crowd of people

Structural Reforms and Income Inequality: Who Benefits From Market-Oriented Reforms?

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Policy Report
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To discover if structural reforms provide benefits to individual groups, Klaus Gründler (EconPol Europe, ifo Institute, LMU Munich), Niklas Potrafke (EconPol Europe, ifo Institute, LMU Munich) and Timo Wochner (LMU Munich) employed macro and micro data to investigate whether the income of low-income citizens increased to a smaller extent than the income of high-income citizens.

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Abstract image of coins and graph illustrating inflation

Monetary Policy, Rational Confidence and Neo-Fisherian Depressions

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Working Paper
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The "Neo-Fisherian" claim has been questioned on the ground that the Fisher equation cannot be used mechanically to peg the long-run inflation expectations. In this working paper, authors Lucio Gobbi (EconPol Europe, University of Trento), Ronny Mazzocchi (European Parliament) and Roberto Tamborini (EconPol Europe, University of Trento) study a New Keynesian economy where agents' inflation expectations are based on their correct understanding of the data generations process, and on their probabilistic confidence in the central bank's ability to keep inflation on target.

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Chinese skyscrapers

Trade Deficit With China - an Issue for the Euro Area?

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EconPol Policy Brief
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The rise of China in the world economy and its growing importance as investor in industrialised and developing countries has raised concerns of policy makers in some countries. Contrary to the trade situation between China and the US, trade between the euro area aggregate and China is almost balanced. On an individual country level, Germany, Ireland and Finland record trade surpluses with China. As trade between the euro area and China is balanced, there is no need for policy action to address any imbalance, however, European markets should only be opened for Chinese companies and investmen

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