Newsletter December 2018
Newsletter with envelope icon
In this issue: Annual conference video; policy briefs – who pays for the US trade war with China, and European financial intergration through securitization; opinion - fixing the euro needs to go beyond economics; new working papers – international competition and rent sharing in French manufacturing, and investment incentives and tax competition under the AGI.
Who pays for Trump’s trade war with China? Plus #EconPol2018 conference video
As we enter our third year, the nine institutions which currently make up EconPol Europe have achieved significant success in line with our goals. EconPol was founded to contribute cross-border scientific research to the discussion of a future design of the European Union, and we have succeeded in reaching policy makers across member states as well as generating worldwide media coverage for our research.  In 2019, we welcome five more associate institutions, expanding our network into Spain, Portugal, Switzerland, the Netherlands and the Czech Republic. We are delighted to add the huge amount of economic expertise this will bring to our team, and look forward to officially announcing our new associates early next year.

Until then, we wish you the very warmest greetings of the season and a happy new year.

EconPol annual conference video

Video from EconPol’s annual conference, held at the Representation of the Free State of Bavaria in Brussels, is now available to view online.

Welcome address
Panel Discussion: Challenges of EU Trade Policy Making
Keynote speech

Plenary session: New Protectionism and its Costs

Simon J. Evenett (University of St. Gallen): New Protectionism: Forms, Scale, and Effects
Hylke Vandenbussche (KU Leuven): US-EU Trade: the Cost of non-TTIP
Stefano Schiavo (University of Trento): The Impact of Trade on European Firms and Workers
Gabriel Felbermayr (ifo Institute): The US-China Trade War: Effects on Europe

Who is paying for the trade war with China?

Import tariffs introduced by the United States and China in September will see Chinese exporters bear approximately 75% of the costs, with the US extracting a net welfare gain of USD 18.4 billion, according to new EconPol research. The tariffs affect around 50% of Chinese products imported to the US, with a value exceeding USD 250 billion. The tariffs introduced by China affect around USD 60 billion worth of goods. The research shows these new tariffs, introduced on 24 September, will increase US consumer prices on affected Chinese products by an average of 4.5%, while the producer price of Chinese firms declines by 20.5%.

Press release
EconPol policy brief 11

Also recently published by EconPol:

European financial integration through securitization
EconPol policy brief 10

Fixing the euro needs to go beyond economics

The euro area is stuck in a situation of conflicts of interests between creditor and debtor countries, says EconPol researcher Anne-Laure Delatte. The political economy of such a situation requires coordinating creditor and debtor countries to distribute the burden of adjustment. Creditor countries require debtors to repay their debt with domestic resources, pushing for spending cuts and tax increases. In turn, debtors are better off if they can delay adjustment and rely on the official euro area safety net if needed. Read the full article.

Investment incentives and tax competition under the AGI

The European Commission’s Allowance for Growth and Investment (AGI) has proposed investment incentives in its two-step approach towards the Common Consolidated Corporate Tax Base (CCCTB). In this latest EconPol working paper, the authors demonstrate that the AGI strengthens investment incentives in high-tax countries and decreases the CCCTB-induced investment push towards low-tax countries. They also demonstrate that the AGI decreases tax competition and that a sufficiently generous AGI reduces tax competition between countries when introduced with the CCCTB. Read more.

Also recently published by EconPol:

International Competition and Rent Sharing in French Manufacturing: A Firm-Level Analysis – Lionel Nesta and Stefano Schiavo
EconPol Europe is a cross-border voice for research in Europe, providing research-based contributions aimed at promoting growth, prosperity and social cohesion in Europe and, in particular, the European and Monetary Union. Our mission is to contribute our research findings to help solve the pressing economic and fiscal policy issues facing the European Union, and to anchor more deeply the idea of a united Europe within member states.
Our joint interdisciplinary research covers:

    •    sustainable growth and best practice,
    •    reform of EU policies and the EU budget,
    •    capital markets and the regulation of the financial sector and
    •    governance and macroeconomic policy in the European Monetary Union.

If you would like further information about EconPol Europe, please contact Juliet Shaw at

Register for the EconPol Newsletter. Stay informed.

Receive all the latest information on EconPol publications and events in our newsletter.
To subscribe, click here.

If you do not wish to receive the EconPol newsletter, please click here to unsubscribe.

Data protection

We would like to inform you that we have updated our data protection guidelines in compliance with the EU’s General Data Protection Regulation (GDPR) of 25 May 2018. Our updated data protection regulations can be accessed online here. We have always treated your data confidentially in the past, only using it for the purpose that you expressly consented to. We would like to continue to send you information on EconPol’s activities in the future. Your personal data (email address and, in some cases, your first name and surname) are only used for the purpose specified above. We do not share your data with third parties under any circumstances.

If you wish to continue receiving information from us, then you do not need to take any further action. Should you wish to restrict or deny us the right to use your personal data in the future, please click here to unsubscribe from our newsletter. If you choose to unsubscribe, all of the data that we collected when you subscribed to the newsletter will be lost. You can unsubscribe to the newsletter at any time by clicking on the link above. Our warmest thanks for your support and interest in EconPol.

Network Members

© EconPol Europe: European Network for Economic and Fiscal Policy Research – ifo Institute – Leibniz Institute for Economic Research at the University of Munich 2018.

Privacy Policy and Data Protection
We place great importance on your privacy and would like to inform you of our updated privacy policy. We treat your information confidentially in accordance with the EU General Data Protection Regulation, which has been in effect since 25 May 2018.
In order to provide you with more transparent and clear information on how we process your personal information, we have divided our privacy policy into various chapters. In this description you will find the basis on which the data is stored and how we use the data. Here, you can also find out more about your rights, such as how to access your information and how to restrict the use of your information. Our privacy policy can be found on our website.

Published: ifo Institute for Economic Research at the University of Munich,
Poschingerstraße 5, 81679 Munich, Tel: +49 (89) 9224-0, Fax: +49 (89) 985369;
Editor: Juliet Shaw.

The reprint of excerpts from this newsletter is permitted only with written permission and provided that the source is acknowledged.