Team
The people behind the ifo Institute offer the very high level of expertise and experience needed to fulfill our research and service mandate.
ifo Viewpoint 234: Economic Consequences of the Russian Invasion of Ukraine
The war in Ukraine is not only a military and geopolitical turning point. It is also changing the economic situation. This affects both the short-term economic trend and the medium-term prospects for growth and prosperity. The previously expected economic recovery will be weakened. There is a threat of stagflation, i.e., a combination of weak growth and high inflation. Monetary policy faces a dilemma: while interest rate hikes can curb inflation, they would further dampen growth.
Ifo Viewpoint No. 173: Brexit and its Economic Implications
Forecasts are notoriously difficult to make. I am nevertheless sure that Britain’s exit from the EU, the so-called Brexit, would be a bad deal both for the Brits and for the rest of the European Union.
ifo Viewpoint No. 210: Time Has Come for Developing European Public Goods
Now that the EU has a newly elected Parliament and a new Commission, what should be its agenda? Traditionally, its focus has been on economic integration, for example through the single market, the euro or banking union. The EU budget is small and still mostly spent on agricultural and transfers to poorer regions. Nearly seventy years after the Coal and Steel Community, however, this emphasis is increasingly odd. European integration delivers benefits (and disintegration has costs), but it is not a sufficient answer to the challenges Europe faces today.
ifo Viewpoint 218: What Does the Temporary Reduction in VAT Achieve?
There’s no lack of money: in its fight against the coronavirus recession, the German government has launched a series of economic stimulus packages, most recently just a few days ago. One particular measure in this latest package is stoking a controversial debate: a temporary reduction in VAT. Between July 1 and December 31, 2020, the standard rate will fall from 19 percent to 16 percent and the reduced rate from 7 percent to 5 percent. This will bring tax relief to the tune of EUR 20 billion. But is this measure really a suitable way to inject strength into the economy?
ifo Viewpoint No. 194: Why We Need to React to Trump
US President Donald Trump began 2018 with a tax policy bang: he announced massive tax cuts in the US, with tax rates on corporate profits falling from 35 percent to 21 percent. With this reform Trump wants to encourage companies to invest more in the USA and to post a greater share of their global profits there.
ifo Viewpoint 233: The Coalition Agreement – A Desire for Something New
Angela Merkel was said to be careful to manage expectations. Those who promise little need not fear criticism if nothing is achieved. The traffic light government is acting differently. Its coalition agreement is ambitious. It wants to massively accelerate the digitalization and decarbonization of the economy while preserving prosperity and inclusion.
ifo Viewpoint 247: The German Economic Model – Decline or Second Economic Miracle?
What is the future of Germany’s economic model? The Russian attack on Ukraine has triggered a debate about the further development of prosperity in Germany.
ifo Viewpoint No. 213: Challenges of Negotiating a Free Trade Agreement between the UK and the EU
Now it is official: at the end of January, the United Kingdom left the European Union – and not in the hard Brexit some observers had feared but an orderly departure. That notwithstanding, Europe is already facing its next challenge. The exit agreement stipulates that the UK will remain a member the customs union and the common market until the end of 2020. By that time, The EU and the UK must have concluded a free trade agreement. If not, customs duties and other trade restrictions would enter into force. However, reaching such an agreement takes time.
ifo Viewpoint 245: Why a Reform of the German Corporate Tax System Is Urgently Needed
The current crises have led to a debate about the future of Germany’s business model and German industry. Rising energy prices, disrupted foreign trade, and the US IRA subsidy program raise the question of what needs to be done to maintain Germany’s competitiveness as a location for companies and highly productive jobs.
Ifo Viewpoint No. 180: The Economic Consequences of Mr. Trump
Politicians across Europe are still reeling at the shock election of Donald Trump as US President. That is understandable. They nevertheless need to snap out of it and start thinking seriously about how Trump’s triumph will impact Europe both economically and politically. The question on everybody’s lips is: how much of his election campaign rhetoric will Trump actually attempt to turn into economic policy and how should Europe react? Although his policy proposals to date have been hazy on detail, a fairly clear picture of Trump’s position has nevertheless emerged in four key areas.
ifo Viewpoint 253: Should the German Minimum Wage Increase to EUR 14 Now?
When politicians introduced the statutory minimum wage in Germany, critics warned that it might become the subject of a bidding war in election campaigns. The solution was a commission formed by representatives of trade unions and employers to propose minimum wage increases, based on the index of collectively agreed wages. The minimum wage was to follow general wage trends, not the other way around, and for a few years this worked well. But during the 2021 federal election campaign – when the minimum wage was EUR 9.60 per hour – some parties called for an increase to EUR 12. The traffic light coalition implemented this demand in 2022.
ifo Viewpoint No. 198: Tariffs on cars
The escalation of the conflict between the USA and its trade partners seems inexorable. In May 2018 Donald Trump commissioned the US Department of Commerce to investigate whether car imports constitute a threat to US national security. The US Department of Commerce points out that the share of cars imported into the US market has risen from 32 percent to 48 percent over the last 20 years. Between 1990 and 2017 the number of jobs in the US automotive industry fell by 22 percent. US firms accounted for only 20 percent of global research and development expenditure in the automotive sector, and for just 7 percent of car part production. It therefore seems very likely that the US government will argue that car imports pose a threat to national security. That is, of course, no more than an excuse to impose tariffs.
ifo Viewpoint 250: Can Economic Growth and Ecological Sustainability Coexist?
Is long-term economic growth compatible with ecologically sustainable development? This question stands as one of the most debated issues of our time. Over the past decades, growth driven by economic liberalization and globalization has brought prosperity to billions and reduced global poverty. However, this positive trajectory has come at a high cost to the environment and the depletion of natural resources. The limitations of economic growth at the expense of the environment are evident. Sustainable economic prosperity can only be achieved in the long run if it is coupled with ecological sustainability.
ifo Viewpoint No. 204: How Serious Politics Must Counter Populism
ifo President Clemens Fuest opposes false political responses to populism. He outlines the four pillars on which liberal economic policy is based: A solid foundation (competition, open markets, private property, flexible prices and wages, personal responsibility), effective regulation, openness and diversity, and a strong welfare state.
ifo Viewpoint No. 186: How Germany Can Cooperate with Emmanuel Macron to Reform the Eurozone
There were sighs of relief in Germany when France elected Emmanuel Macron as President, but his victory also triggered a debate over Macron’s reform plans for the Eurozone. His critics claim that Macron wishes to turn the currency union into a transfer union against Germany’s interests. His supporters, by contrast, are calling on Germany to support Macron, or face the spectre of a Front National victory in the next elections. Both positions are unreasonable. Macron should be given time to further develop and explain his proposals for Eurozone reform. At the same time – and despite Germany’s delight at the victory of an EU-friendly president in France and its willingness to work with him – it is not the task of the German government to ensure that Macron wins the next election. He is the only person who can make that happen.
ifo Viewpoint 235: Broad Tax Cuts for Gasoline Are the Wrong Way to Go
In view of drastic rises in energy prices, there are increasing calls for governments to shield citizens from the burden. The French government has announced that it will reduce gasoline tax by EUR 0.15 per liter for four months starting in April. In Germany, there is criticism that the government is earning money from the increase in the price of gasoline via VAT. The claim is that the additional revenue should be returned to the citizens. Some are calling for fuels to be subject only to the reduced VAT rate of 7 percent. Since VAT rates cannot be changed at will due to European law, German Finance Minister Christian Lindner wants to introduce a gasoline rebate – people should submit fuel bills to the tax office and get a portion refunded.
Ifo Viewpoint No. 174: Refugees Will Not Lighten Germany’s Load but Deserve Its Support
Around one and a half million people immigrated to Germany in 2015, including many from Syria, who were fleeing from the civil war in their home country. Far fewer immigrants are expected to arrive in 2016, as other European countries have closed their borders and the Balkan route has also been blocked. In the face of this wave of immigrants, Germany’s population showed an amazing willingness to help people fleeing war and political repression. That was impressive. But what are the economic implications of the immigration wave?
ifo Viewpoint 246: The Current Banking Quake: Where Does It Come from and What Should Policy Makers Do?
The crises at Silicon Valley Bank and Credit Suisse have shaken the world of finance. While policymakers and central banks are being placatory, the markets are not calming down. Banks that very recently seemed healthy are running into liquidity problems.
ifo Viewpoint 219: Collective Bargaining in the Public Sector
On October 22 and 23, collective bargaining in the public sector will enter its third and possibly decisive round. The trade union ver.di is demanding 4.8 percent more pay, or at least EUR 150, for federal and municipal employees. While collective wage settlements apply only to salaried employees in the first instance, they are usually also adopted for civil servants. What should we make of this demand – and what is an appropriate wage settlement in the current situation?
ifo Viewpoint 224: Central Bank Swerving from Its Path
The Executive Board of the European Central Bank (ECB) wants to make monetary policy “greener.” Hardly a week goes by without the topic being promoted by one of the board members. In addition to the visible effort to make the traditionally dry seeming monetary policy appear practically helpful and close to the people, the ECB’s activities in the matter itself amount to a further significant expansion of its competencies. This involves, first, independently assessing the environmental friendliness of projects financed by corporate bonds; and second, giving preference to positively rated projects in various securities transactions.