News Archive

A sharp downturn in industrial production in the German car industry in the third quarter 2018 had an immediate impact on its main trading partners and is causing global and sectoral losses. The drop is raising questions about broader economic consequences, say EconPol researchers, who expect German car industry to stay in recession for the near future.

Press release (English): https://www.econpol.eu/press_releases/2019-09-05

China’s success with state capitalism poses security concerns and huge economic challenges for western market economies. Its economy has boomed over the past 20 years, with private industry contributing much to recent success. And while private industry has helped the rise of China, it’s only one part of the economy. State enterprises and state-controlled firms play a dominant role; the former accounts for 35% of China’s GDP.

To prevent the average global temperature rising by more than 1.5° celsius, we need to reduce global net greenhouse gas (GHG) emissions to zero by 2050. The EU’s current target is a reduction of emissions by 80-95% by 2050. However, the EU itself estimates that it will only achieve about 60% with a continuation of current policies. In 2017, GHG emissions rose after falling by almost 23% between 1990 and 2016. Prof. Dr. Karen Pittel examines the evidence and suggests a framework for action.

In this analysis of the effects of the preferential tax treatment of IP income in European countries, authors provide a comparison of pre-tax profits of firms in patent box countries – before and after the introduction of patent boxes – and provide the comparison for two types of firms: affiliates that belong to a MNE and those that belong to domestic conglomerates. Contrary to expectation, the overall tax base adjustment might lower tax revenues collected from MNEs.

Is a fiscal stimulus of investment a viable complement to, or substitute for, monetary policy? The authors of this working paper show that, under a balanced-budget stimulus, investment acceleration may come at the expense of decreased total welfare and that where uncertainty is higher about private returns a net efficiency loss is more likely. However, the risk of such negative outcome strongly declines when the government spending is balanced by taxing both private and public returns on investment.