Press releases

Advances in total factor productivity (TFP) are important for sustaining economic growth in modern economies, in particular in the face of a declining working-age population. In a new EconPol Europe policy brief we identify investment in research and development, good governance, the capital intensity, a high share of information technology in the total capital stock, and the number of industrial robots per employee as conducive to TFP growth. Based on the empirical results, policies that are beneficial for capital formation in general, investment in computer technology, research and development as well as the use of industrial robots could boost TFP in Europe.

Germany’s current account surplus has fallen slightly. In the current year, it is expected to decline to 7.8 percent of annual economic performance after 7.9 percent in 2017, as calculated by the ifo Institute for the research network EconPol Europe. The EU considers a maximum of six percent as sustainable in the long term. “The decline is attributable to three factors: the surplus in goods exports is unlikely to increase, income from foreign assets is set to decline slightly and, in addition, annual economic output, including inflation, will rise sharply – by 3.7 percent”, observes ifo researcher Christian Grimme.

The majority of German voters do not support the concept of European unemployment insurance. 57 percent of Germans oppose the idea, while just 18 percent support the reform proposal. A sovereign insolvency procedure, by contrast, garnered the support of 48 percent of survey participants, according to a new study for the research network EconPol Europe published on Thursday to mark the EconPol panel discussion at the Munich Economic Summit.

A plan to exit the euro supported previously by Paolo Savona, now Italy’s new Europe Minister, “seems to confirm Germany’s worst fears,” according to a recent analysis by EconPol expert and Director of the Center for European Policy Studies (CEPS) Daniel Gros. “But what is particularly astonishing about the ‘plan’ is […] the open intention to stick it to the rest of the world, particularly Italy’s euro partners,” writes Gros in: “How to exit the euro in a nutshell – ‘Il Piano Savona’ (EconPol Opinion No.8).

The head of the ifo Center for International Economics, Gabriel Felbermayr, has urged Europeans to strive for order in their current account statistics with the US. “The US statistics on its current account with the EU differ significantly from the comparable European statistics”, he said, basing his comments on an article he co-authored for the EconPol Europe research network. “The differences go so far that the US has a current account surplus of $14 billion with the EU (about €11.6 billion) for 2017, while the EU posts a European surplus of €170 billion in 2017. Something is wrong here, and most likely on the European side, unfortunately.”