Corporate Taxes Reduce Investment

Pillars-EconPol Conference on European Labor Markets
  • Germany’s Dependence on Raw Material Imports
  • Higher Corporate Taxes Reduce Private Investments: New Evidence from Germany
  • The Added Value of the European Recovery Fund

Pillars-EconPol Conference on European Labor Markets
How can European labor markets master the technological and structural change? This was the key question of the Pillars-EconPol Conference on 11/12 July 2022 in Brussels. The conference brought together data and insights, policymakers and practitioners, old problems and new tools, and most critically, representatives from both fronts, economics and technology. The videos of the second conference day are now online on our website and Youtube.

Panel discussions:

Also, check out the interviews with our conference participants:

Germany’s Dependence on Raw Material Imports
Microchip and gas shortages became a symbol of supply chain disruptions during Covid-19 und due to the Ukraine war. At the same time, a survey from the ifo Institute shows that over 74% of German manufacturing firms report production disruptions due to shortages of different types of inputs and raw materials. A new  EconPol Policy Brief identifies nine such critical materials that are used in more than half of key technologies and for which Germany is completely dependent on imports.
Higher Corporate Taxes Reduce Private Investments: New Evidence from Germany
Higher corporate taxes lead to a decline in private investment in Germany. This is the results of a new  EconPol Policy Brief. A one-percentage point increase in local business tax leads to a 3% decrease in investment activity. This means that each additional Euro of tax revenues comes at the cost of a decrease in firm investment of more than 2 Euro. If taxes are increased during a recession, the magnitude of the investment response can even be twice as large.
The Added Value of the European Recovery Fund 
How do national governments use funds from the European Recovery and Resilience Facility? The new EconPol Policy Report conducts an in-depth analysis of the national recovery and resilience plans of Austria, Belgium, and Germany. The results suggest that the EU funds are extensively used to replace national spending that governments would have made anyway. The share of new investment projects is smallest in Germany (52%) and highest in Belgium (77%). Austria ranks in the middle with 54%.
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EconPol is CESifo’s economic policy platform. With key support from the ifo Institute, it seeks to leverage CESifo’s globe-spanning network of 1 800 high-ranked economists – eleven of whom have won the Nobel Prize – and ifo’s decades-deep research expertise to provide well-founded advice to European policymakers.
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