EconPol Working Paper Series

Cover of EconPol Working Paper 56

The Global Economic Impact of Politicians: Evidence from an International Survey RCT

Dorine Boumans (EconPol Europe, ifo Institute), Klaus Gründler (EconPol Europe, ifo Insitute, University of Munich [LMU], CESifo), Niklas Potrafke (EconPol Europe, ifo Insitute, University of Munich [LMU], CESifo), Fabian Ruthardt (EconPol Europe, ifo Insitute, University of Munich [LMU])

A large-scale RCT survey of 843 experts in 107 countries examined how the US president influences economic expectations of international experts, including GDP growth, unemployment, inflation and trade in their country. The results show that the election of Joe Biden increased growth expectations of international experts by 0.98 percentage points for the year 2021, that treatment effects materialize only in the short-run and experts’ uncertainty increased after the election. The results suggest that exceptional politicians influence global economic outcomes.

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Cover of EconPol Working Paper 55

(Non-)Keynesian Effects of Fiscal Austerity: New Evidence from a Large Sample

António Afonso, José Alves, João Tovar Jalles

Using a large sample of 174 countries between 1970 and 2018, authors empirically assess whether a usually expected negative response of private consumption and private investment to a fiscal consolidation is reversed. They find that increases in government consumption have a Keynesian effect on real per capita private consumption; there is a positive effect of tax increases on private consumption when there is a fiscal consolidation; there is a crowding-in effect for private investment, from fiscal contractions; expansionary fiscal consolidations occur particularly in highly indebted advanced economies following an increase in taxes. The negative effect of taxation on private consumption is larger when an economy is experiencing a financial crisis, but it is not consolidating.

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Cover of EconPol Working Paper 54

International Transmission of Interest Rates: The Role of International Reserves and Sovereign Debt

António Afonso (EconPol Europe, ISEG – School of Economics and Management, Universidade de Lisboa; REM – Research in Economics and Mathematics, UECE), Florence Huart (University of Lille, LEM), João Tovar Jalles (EconPol Europe, ISEG – School of Economics and Management, Universidade de Lisboa; REM – Research in Economics and Mathematics, UECE), Piotr Stanek (Cracow University of Economics)

In this study of the determinants of international transmission of interest rates with a special emphasis on the role of international reserves and government debt, authors confirm that the trilemma still holds. They find significant spillovers from the U.S. interest rates to other countries, mostly for Advanced Economies; a dampening effect of the share of external liabilities in the domestic currency; a negative effect of international reserves on interest rates; higher reserves decrease risk premia for long-term interest rates; the significance of spillovers fades once the sovereign debt reaches 100% of GDP in developed countries.

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Cover of EconPol Working Paper 53

The Deserving and the Undeserving: “Heuristics” or “Automatism”?

Peter Grand, Guido Tiemann (EconPol Europe, IHS Vienna)

Voter attitudes towards the welfare state, its specific programs, or specific people who are supposed to “benefit” from the implied social transfers have always been of vital interest for discussions in the public and political spheres. In this working paper, Peter Grand and Guido Tiemann (EconPol Europe, IHS Vienna) examine public sentiments concerning the conditionality of unemployment benefits and find that opinion is influenced by the supposed level of 'deservedness', along with economic, social, and institutional context.


 

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Cover of EconPol Working Paper 52

Offshore Tax Evasion and Wealth Inequality: Evidence from a Tax Amnesty in the Netherlands

Wouter Leenders (University of California), Arjan Lejour, Simon Rabaté, Maarten van’t Riet (EconPol Europe; CPB Netherlands Bureau for Economic Policy Analysis)

While tax administrations have made considerable progress in fighting tax evasion, it remains a seemingly inextricable part of our world. Exploiting unique datasets covering over 28,000 tax evaders in the Netherlands, Wouter Leenders, Arjan Lejour, Simon Rabaté and Maarten van’t Riet investigate the distribution of tax evasion and its implications for the measurement of wealth inequality. They show that the distributional pattern of tax evasion depends on the type of tax evasion, e.g. it depends on the offshore country of choice. They explore a number of explanations to account for the differences in results and caution against projecting distributional patterns of detected tax evasion onto still undetected evasion. 
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