An Estimation of the Revenue Loss from Introducing a Notional Interest Deduction on Nominal Capital into the German Corporate Tax. Capital income taxation in Germany distorts financing decisions of corporations as the after-tax cost of capital for equity is considerably higher than for debt....

This paper shows how to evaluate investment projects in transparently taxed partnerships and individual enterprises. After the German income tax reform 2008, there is an option for taxing retained earnings at a flat rate of 28.25 %‚ followed by a second taxation in the year of withdrawal. This...

In this paper we analyse the effect of immigration on the labour market prospects of different skill groups among natives. We develop a model of endogenous labour supply in which immigration affects educational decisions of natives. We argue that the distributional consequences of immigration...

The German Council of Economic Experts (GCEE) has the legal mandate to independently assess the state of the German economy, to formulate its expert opinion regarding issues of economic policy and to alert readers to any undesirable developments which threaten to arise in this context. While...

The intensity of the euro crisis has been reflected in significant increases in sovereign bond yields in the most troubled countries. This has triggered a debate over whether this increase can be attributed solely to fundamental factors or whether part of the increase represents redenomination...

We analyze whether a redistributive government should provide ex ante insurance against unfortunate outcomes or whether it should instead rely on transfers for redistributing income ex post. To this end, we develop a model of education in which individuals face educational risk and wage...

The Euro area is experiencing a severe and highly complex crisis. It comprises three problem areas: the difficulties of some highly indebted European sovereigns to ascertain funding at palatable cost, the disconcerting fragility of the European banking system and disappointing growth prospects...

The current state of affairs in the euro area (EA) instills hope in economic recovery but also substantial concern. The crisis countries have made considerable, albeit quite uneven, progress in central areas of reform. Yet severe obstacles remain. Moreover, European policy makers have reformed...