On September 24th 2018, the United States introduced import tariffs on a wide range of Chinese products. The tariffs will affect US imports from China with a value that exceeds USD 250 billion -around 50% of all imports. In this analysis we show that, contrary to public opinion, the greatest...

This policy brief uses a modern general equilibrium trade model to simulate the effects of the Chinese-American trade dispute. It finds that the tariffs and countertariffs implemented as of today cost the US €2.6 billion and China €5.7 billion of GDP. Both economies lose, but China loses...

This Policy Brief analyses the long-run effects of an economic decoupling between the political West (i.e. the EU, the US and their allies) and the East (first and foremost Russia and China). A decoupling of Russia from the US and its allies would have much more severe long-term impacts for real...

On 1 January 2023, Croatia became the newest member of the Schengen Agreement of the European Union (EU) and also joined the Eurozone. This will not only mean a new currency and the elimination of border controls - allowing thus free movement within the Schengen area. It will also mean...

Reforming the Eurozone is a top priority on the European policy agenda. France and Germany are expected to launch a joint initiative to reform the institutions of the currency union. To be successful, this initiative will have to be acceptable not only to Germany and France, but to all member...

In recent studies the IMF and the OECD claim that inequality has a negative impact on economic growth and conclude that redistribution policies have no adverse growth effects. We argue that this claim is misleading. We show that, for developed countries, the correlation between inequality and...

Negotiations between the EU and the UK have reached deadlock, with the positions of the UK (no backstop, no single market, no customs union, no dependence on the ECJ), Ireland (backstop, no hard border) and the EU (backstop, indivisibility of the four freedoms, no cherry-picking) all being...

This paper contributes to the current debate how a faster implementation of structural reforms fostering the process of economic convergence in Europe can be achieved. We discuss the rationale and potential adverse effects of providing financial incentives for structural reforms. After a...

In the debate on euro area fiscal governance, the current deficit rules of the EU have repeatedly been criticised to have a pro-cyclical effect, leading to overly lax fiscal policies in good times and a too restrictive regime in bad times. An analysis by EconPol researchers Clemens Fuest (ifo)...

In this paper we discuss to what extent the declining difference between interest rates and growth rates (r-g) pointed out recently by Olivier Blanchard (2019) for the case of the US also characterizes the economic situation in Europe. We show that r-g has been positive on average but declining...