- Complex Europe: Quantifying the Cost of Disintegration
- Has the Time Come for Excess Profit Taxes?
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- Europe’s Industrial Policy and the Response to IRA
- Higher Wages May Help Overcome the Shortage of Skilled Workers!
- The Current Banking Quake: Where Does It Come from and What Should Policy Makers Do?
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- How to Reconstruct Ukraine? Challenges, Plans and the Role of the EU
- The Demand for Data Skills in German Companies: Evidence from Online Job Advertisements
- The Closure of Police Stations Leads to an Increase in Theft Crime
- Regional Income Inequality in Germany
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- Panel discussion: Bill Gates, Jutta Urpilainen, and Clemens Fuest
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A disintegration of the European Union would mean a massive loss of prosperity for the member states. A new Policy Brief calculate changes in GDP per capita in EU states as well as in other third countries compared to the base year 2014 for several scenarios: complete disintegration of the EU; disintegration of the European single market; disintegration of the customs union; dissolution of the Schengen Agreement; as well as dissolution of all existing free trade agreements between the EU and third countries.
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Excess profit taxes (EPTs) emerge as an option to contribute to the extra needed revenues, avoiding a general increase in corporate tax rates, while having the prospect to serve as a gateway to converge toward a permanent efficient rent tax instead of the corporate income tax. General unilateral EPTs would face the same international pressures from profit shifting and tax competition as the existing corporate income tax, calling for international coordination. A coordinated EPT on multinational enterprises can take the form of a formulary apportionment approach that allocates the EPT base using sales by destination.
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Europe is seeing a renaissance in industrial policy. Industrial policy usually involves influencing an economy’s sectoral development by means of subsidies, partial state ownership of companies, or regulations. It can also include promoting mergers of companies to form national champions – large companies which are supposed to conquer the world’s markets with their governments’ support. It’s also common to bar foreign investors from taking over domestic companies that are deemed strategically important.
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There is currently intense debate in many countries about a shortage of skilled workers. From an economic perspective, there is a simple answer to shortages: higher prices. In a labor market context, this suggests shortages could be overcome by raising wages. What would the consequences be?
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The crises at Silicon Valley Bank and Credit Suisse have shaken the world of finance. While policymakers and central banks are being placatory, the markets are not calming down. Banks that very recently seemed healthy are running into liquidity problems. Confidence that banks are solvent is critical to financial stability. But it is fragile. If there is even a suspicion that a bank cannot service all its customer withdrawals because it has invested the money for the long term, there is a risk of a bank run.
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Policy Debate of the Hour
How to Reconstruct Ukraine? Challenges, Plans and the Role of the EU
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Economic Policy and its Impact
Does the teaching of evolution make any difference to students? Reforms of the coverage of evolution in US education standards show that greater exposure to evolution teaching not only improves students’ knowledge of evolution by the time they graduate from high school, but it also enhances their belief in evolution in adulthood. What is more, the reforms affect high-stakes life decisions, namely the probability of choosing a career in life sciences.
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Institutions Across the World
Income inequality has increased in Germany. A new analysis shows that in 1998, the richest 10 percent of taxpayers earned 33.8 percent of total income. In 2016, that figure rose to 37.2 percent. Over the same period, the poorest 50 percent’s share of income fell from 19.3 to 15.9 percent. Differences in income within municipalities account for more than 95 percent of national inequality. On average, incomes in municipalities in western Germany are less equally distributed than in eastern Germany.
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Big Data-Based Economic Insights
Data skills are required in many job advertisements in Germany and are becoming more relevant. This is a positive sign for the data economy in Germany, as companies increasingly realize the potential of data and try to implement it in their own operations. However, a growing demand for employees with data skills poses challenges for companies in the future in view of the existing skills gap, especially in digitalization professions. Policymakers should intervene by, for example, taking measures that make it easier for companies to recruit foreign workers.
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Bill Gates, Co-chair of the Bill & Melinda Gates Foundation, Jutta Urpilainen, European Commissioner for International Partnerships, and Clemens Fuest, President of the ifo Institute, were debating in a panel discussion on the subject “A Geoeconomic Watershed Moment – What is Needed for New Partnerships between Europe and Africa?”. The video of the panel discussion is now online on the event website and YouTube.
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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.
Drawing on the wide range of specializations of its members, EconPol’s mission is to contribute to the crafting of effective economic policy in the face of the rapidly evolving challenges faced by the European Union, to the ultimate benefit of all its member states.
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