Press releases

Tax increases in industrialized countries are often implemented directly after elections. This is a finding of a new study by the research network EconPol Europe. “Our findings show that politicians seem to postpone tax rate increases to the year after elections. We saw increases mainly in value added and sales tax (VAT) rates after elections – in other words, taxes that the majority of voters feel directly in their wallets,” says Niklas Potrafke, co-author of the study.

The optimal minimum wage for Italy should range between EUR 8.25 and 9.65 per hour. This is one of the main conclusions of a new study by the research network EconPol Europe based on data from 2018. This amount corresponds to around 63 to 73 percent of the median wage in the observed sample of Italian firms. “We also show that the calculated value of the optimal minimum wage has remained relatively stable between 2011 and 2018,” says Mauro Caselli, one of the co-authors of the study.

High public debt ratios resulting from the Covid-19 crisis should be considered a potential source of problems, even in an environment of low interest rates. This is the key conclusion of a policy paper by Daniel Gros (EconPol, CEPS), which will be presented at EconPol’s annual conference. “A key but often overlooked legacy of the Covid-19 crisis is increased uncertainty,” Gros explains. In his paper, he points out that what makes increased uncertainty more important is that the cost of public debt goes up more than linearly with higher debt ratios.

European citizens prefer investments in community renewable energy (CRE) projects that are administered by local community organizations rather than by utility companies. This is one key result of a recent survey by the research network EconPol, leading to a clear policy recommendation: if EU member states facilitate the setup of local cooperatives, i.e. by helping to navigate bureaucratic and regulatory burdens, CRE projects could become a crucial stepping-stone in reaching the EU’s newly set target of producing 40 percent of energy from renewable sources by 2030.

The implementation of recovery funds under the EU’s Covid-19 recovery program NextGenerationEU should be aligned with business cycle phases to ensure that financial support will have the most even and efficient impact across regions. This is a conclusion derived from a recent EconPol study that analyzed the impact of the European Structural and Investment Funds on regional development over the period 1986–2018.