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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.

Even in times of the corona pandemic, environmental and climate protection are among the dominant topics in the economic policy debate:this is justified, as global warming is one of the greatest challenges of our time. Tackling it requires a transformation of the economy by reducing CO2 emissions and adapting to the climate change that has already occurred or will occur despite all efforts. European policymakers have set out to drive this transformation under the banner of the Green New Deal, its objectives shared by a large majority of the population.

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.

Sacrificing lives does not save the economy, according to this latest policy report from Panu Poutvaara and Madhinee Valeyatheepillay: countries that fail to suppress the pandemic risk a disastrous overburdening of their health care system and patients who could have been otherwise saved die. Short of an effective vaccine, no single measure is enough to stop the pandemic. Instead, societies need a combination of effective social distancing measures, careful hygiene, use of masks in indoor public spaces and contact tracing.

This working paper, from António Afonso, João Tovar Jalles and Ana Venâncio, evaluates the effects of structural tax reforms on government spending efficiency in a sample of OECD economies over the period 2007-2016. Increases in tax rates result in falling public efficiency, with the negative effect found to be more significant for increases in personal income tax and value added tax. In times of economic expansion, increasing the corporate income tax base and reducing personal income tax rates were found to have a positive impact on public sector efficiency.