News Archive

In this working paper, António Afonso (EconPol Europe; ISEG – School of Economics and Management, Universidade de Lisboa; REM – Research in Economics and Mathematics, UECE) and Nuno Verdial (ISEG – School of Economics and Management, Universidade de Lisboa) analyze the events of the 2007/2008 financial crisis and European sovereign debt crisis with a focus on Portugal and Spain. They find that that the pricing of sovereign risk changed with the crisis and the “whatever it takes” speech of Mario Draghi.

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.

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.

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.

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.