News Archive

The EU faces the challenge to combine large and sustained investments to promote the transition towards a green, digital, and competitive Europe while maintaining fiscal sustainability. Based on a comprehensive literature review on the effects of fiscal rules and investment clauses on public finances, this in-depth analysis provides some guidance how higher public investments can be achieved by a targeted golden rule without harming fiscal sustainability in the EU fiscal framework.

The new Policy Brief studies how tax and benefit systems in Europe in general, and unemployment benefits and minimum income support (MIS) systems in particular, perform in terms of income stabilization under comparable shock scenarios. Nordic and Continental European welfare states tend to provide higher income stabilization compared to Post-Socialist, Southern European and Liberal welfare states. MIS systems play only a limited role in the stabilization of household incomes. The importance of MIS schemes increases when macroeconomic shocks last longer.

The US Inflation Reduction Act (IRA) promotes renewable energy and contributes to climate protection, but also offers generous tax credits and subsidies to incentivize production in the United States. Economic experts in major European countries are particularly critical of the IRA. This is the finding of a global survey carried out by the ifo Institute in collaboration with the Swiss Economic Policy Institute published in the new EconPol Policy Report 41.

The Covid-19 pandemic propelled an enormous uptake in hybrid and fully remote work. Over time, it has become clear that this shift will endure long after the initial forcing event. There are few modern precedents for such an abrupt, large-scale shift in working arrangements. This article analyzes the full text of hundreds of millions of job postings in five English-speaking countries. In doing so, it applies a state-of-the-art Large Language Model (LLM) to analyze the text and determine whether the job allows remote/hybrid work.

Economic sanctions induce considerable economic damage in the target countries. Sanctions by the United Nations cause growth in sanctioned countries to decline by 2 percentage points annually. Extrapolated over ten years, this is equivalent to a 25 percent drop in per capita economic output. Unilateral sanctions by the US lead to an annual decline in growth of almost 1 percentage point in the countries affected. In the long term, this corresponds to a 13 percent slump in the economy’s output per capita.