News Archive

Euro coins

(Un)Intended Effects of Preferential Tax Regimes: The Case of European Patent Boxes

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Working Paper
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In this analysis of the effects of the preferential tax treatment of IP income in European countries, authors provide a comparison of pre-tax profits of firms in patent box countries – before and after the introduction of patent boxes – and provide the comparison for two types of firms: affiliates that belong to a MNE and those that belong to domestic conglomerates. Contrary to expectation, the overall tax base adjustment might lower tax revenues collected from MNEs.

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Arrows illustrating budgets

Balanced-Budget Fiscal Stimuli of Investment and Welfare Value

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Working Paper
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Is a fiscal stimulus of investment a viable complement to, or substitute for, monetary policy? The authors of this working paper show that, under a balanced-budget stimulus, investment acceleration may come at the expense of decreased total welfare and that where uncertainty is higher about private returns a net efficiency loss is more likely. However, the risk of such negative outcome strongly declines when the government spending is balanced by taxing both private and public returns on investment.

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European Central Bank Frankfurt

Current Account Imbalances and the Euro Area: Alternative Views

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Working Paper
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The Euro area is caught in a "maze of peculiar regulations" and referring to current account imbalances (CAI) as a catch-all indicator of financial efficiency may lead to seriously misplaced policies, according to Ronny Mazzocchi (European Parliament) and Roberto Tamborini (University of Trento), the authors of this latest EconPol working paper. The paper examines the controversial points about the causes, meaning and consequences of CAI, and discusses the alternative policy prescriptions that emerge.
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Italy flag in Europe

Your Vote is (no) Secret! How Low Voter Density Harms Voter Anonymity and Biases Elections in Italy

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Working Paper
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The density of voters in polling regions limits the secrecy of voting and can affect the outcome of Italian elections, with the same impact on countries with a similar voting mechanism. In the first study to analyze the link between voter density and election bias, authors Mauro Caselli (University of Trento) and Paolo Falco (University of Copenhagen) examined all municipal elections conducted in Italy from 1989 to 2015. They found that lower voter density significantly increases the probability of re-election for an incumbent in a municipal office, while in areas with a higher number of voters the probability of re-election for an incumbent falls.
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Illustration for EconPol Opinion 20

Is Proportional Representation a Cure for Democratic Discontent?

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Opinion
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Public dissatisfaction with politicians and representative democracy is widespread in Europe and should not be taken lightly. The enduring protest of the ‘Yellow Vests’ in France is just one prominent example of the popular view that elections regularly fail to select governments that are reliably responsive to the preferences of a large part of the population. EconPol researcher Michael Becher (IAST, Toulouse) says resolving this dilemma requires a value judgement.
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