Greening the Economy by Green Finance?

  • What is Needed for New Partnerships between Europe and Africa?
 POLICY BRIEFS          
  • The Interplay of Interest Rates and Debt-Financed Government Spending 
  • Climate Change: Greening the Economy by Green Finance? 
  • Do School Curricula Matter to Students in the Long Run?
  • Narratives in ECB Press Conferences
  • How to Incentivize Tax Compliance when Households Demand Services? 

What is Needed for New Partnerships between Europe and Africa? 

(Bill Gates, Jutta Urpilainen & Clemens Fuest)

Climate crisis, Covid-19 pandemic, and Russia’s invasion of Ukraine: recent crises are creating new geoeconomic challenges. What do these challenges mean for future relations between Europe and Africa? What new opportunities will arise? Bill Gates, Co-chair of the Bill & Melinda Gates Foundation, Clemens Fuest, President of the ifo Institute, and Jutta Urpilainen, Commissioner for International Partnerships at the European Commission, will discuss geoeconomic challenges posed by recent global crises and ponder which opportunities they might bring for new partnerships between Europe and Africa. Alexandra Foederl-Schmid (Deputy Editor-in-Chief of Süddeutsche Zeitung) will be the moderator. 
The event will take place on February 17, 2022 as an online event with a livestream starting at 9:00 h
 POLICY BRIEFS          

The Interplay of Interest Rates and Debt-Financed Government Spending

Persistently low interest rates on government debt over past decades have prompted some economists to question the wisdom of fiscal policies that restrict the use of deficits to finance government spending. The widely held view that there is no, or only a low fiscal cost from debt-financed increases in program spending can be misleading. Higher public sector debt levels can lead to higher real interest rates and lower economic growth rates, forcing the government to run a smaller primary deficit to stabilize the debt ratio. This will push up the average fiscal cost of program spending.

Policy Debate of the Hour

Climate Change: Greening the Economy by Green Finance?

Economic Policy and its Impact

Do School Curricula Matter to Students in the Long Run?

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.

Institutions Across the World

How to Incentivize Tax Compliance when Households Demand Services?

To increase tax compliance in the provision of services to households, several countries have introduced policies to encourage consumers to demand legally provided services. Since the lower price is an important determinant of the decision to demand undeclared goods or services, the goal of these policies is to reduce the price premium for declaration. Tax credits increase households’ willingness to pay for an invoice; however, the effectiveness depends on their design. A tax credit that makes the financial benefit salient to consumers is most (cost-)effective. Therefore, governments should consider that tax credits are related to high windfall effects.

Big Data-Based Economic Insights

Narratives in ECB Press Conferences

Communication is essential for central banks. For the European Central Bank (ECB), the press conference immediately after the Governing Council meeting is the primary communication device. What are the main communication patterns in the ECB press conference? Do shifts in communication patterns affect stock market volatility on the Governing Council meeting days? An analysis of the ECB communication on the Governing Council meeting days shows that topic models can be used to identify different phases in ECB communication and that transition to a different phase in communication increases market uncertainty.
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Editor: Eberhard Beck

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