News Archive

The creation of the European Monetary Union (EMU) in 1999 was expected to become a catalyst for real convergence in Europe. However, the authors of this policy report find that real divergence actually increased from the early 1990s, as evidenced by low productivity growth in the "periphery" of the Euro area relative to "core" countries. The report investigates the role of sectoral reallocation in this divergence, focusing on three archetypal countries: France, Germany, and Spain.

This EconPol paper evaluates the relevance of the taxation for public spending efficiency in a sample of OECD economies in the period 2003-2017. It finds that inputs could be theoretically lower by approximately 32-34%; the Malmquist indices show an overall decrease in technology and in TFP. Crucial for policymaking, the authors find that expenditure efficiency is negatively associated with taxation, more specifically direct and indirect taxes negatively affect government efficiency performance. The same is true for social security contributions.

Freedom of movement of workers is one of the fundamental ‘four freedoms’ of the European Union and has been in force for decades. Economists have long considered that labour mobility is too low in EU, but this is changing as more and more EU citizens move to other Member States to work. Cinzia Alcidi and Daniel Gros examine the factors that have driven the growth in intra-EU labour mobility in this latest EconPol opinion.

The unanimity requirement for EU legislation on taxation in the Council has come under attack. Early this year, the European Commission launched an initiative to introduce majority voting for tax-policy decisions. Friedrich Heinemann analyses the arguments of the Commission and finds criticism unconvincing and misleading in this EconPol opinion.

The recent financial crisis and subsequent global recession have been followed by a wave of macroprudential measures in the housing market. At the same time, governments have a long tradition of conducting tax policies which encourage households to acquire owner-housing. These tax advantages may be at least partly responsible for the need to regulate borrowing. In terms of policy, the goal should be to identify instruments that reduce the negative effects of household leverage while minimizing the welfare costs to households. This EconPol policy brief examines the joint effects of the tax system and credit regulation.