News Archive

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30 Years of Mercosur – Status Quo and Future Integration Steps

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EconPol Opinion
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Thirty years after its foundation, Mercosur’s member countries have little reason to celebrate. On the one hand, trade liberalization within Mercosur in the first years after its foundation have led to an intensification of intra-Mercosur trade and can be regarded as an early success. On the other hand, the transition from a trade agreement to a customs union has failed and deeper integration steps hardly seem feasible.

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Bank notes

Removing Welfare Traps: Employment Responses in the Finnish Basic Income Experiment

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Working Paper
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This research provides evidence that replacing minimum unemployment benefits with a guaranteed basic income of equal size has minor employment effects in an advanced country. The study examined 2,000 benefit recipients in Finland who were randomized to receive a monthly basic income between 2017 and 2018.

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Corruption and Economic Growth: Does the Size of the Government Matter?

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Working Paper
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Corruption has a negative effect on the economy - specifically on the level and growth of GDP - and large governments register less benefit from reducing corruption than small governments. This working paper from António Afonso and Eduardo de Sá Fortes Leitão Rodrigues finds that developing economies, regardless of government size, benefit less from reducing corruption and government size is not sufficient to explain the influence of corruption on economic activity - although the level of effectiveness of public services is crucial.

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Laboratory testing

Incentives for Accelerating the Production of Covid-19 Vaccines

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Policy Brief
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Delays in the availability of vaccines are very costly for society but existing fixed price contracts provide no incentives for producers to speed up delivery: a dose delivered tomorrow receives the same price as a dose delivered in the next quarter. The benefits for early delivery are huge for society, but non-existent for suppliers. A better contract would have the price fully  variable over time. In this policy brief, the authors show that it is straightforward to design an optimal contract, which aligns the time paths of the price with that of the social value of a vaccination.

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