Publications

A cynical English expression popular in sporting circles is “All the Gear and No Idea”. This is expressed, sotto voce, at the club bar when mocking a typically well-off amateur sportsman who has shown up at the ski slope, the golf course or the clay pigeon shoot with the most expensive equipment and trendiest clothes, appearing confident. Sadly, he then falls flat on his face (literally in the skiing case), or fails to drive the golf ball past the ladies’ tee, or misses every clay. We suspect that outgoing President Draghi felt somewhat embarrassed along these lines as he delivered his penultimate press conference on September 12th, because everybody keenly awaiting his announcement knew that he and his crack team are aware that his 8-year tenure has been disappointing. The ECB has broadly two functions. In one it is paralysed – the quest for a “deeper” European Monetary Union (EMU), and in the other it is going around in circles – price stabilisation.

Central banks play a prominent role in regulating modern economies. They enjoy a high reputation for their technical competence, and provide analyses and forecasts that influence the behavior of markets and the policymakers’ decisions, with emphasis on monetary policy. What if their forecasts are systematically biased?

Germany’s labour market is buzzing. The unemployment rate is currently close to 5%. Although the business cycle could cool down in the near future, the trend is not expected to reverse course in the coming years. In the long run, however, pessimism dominates. As automation intensifies, many observers expect an era of mass unemployment in which only highly-qualified skilled workers will have a regular employment contract. At the same time, baby boomers will retire, and the decreasing labour force might lead to a skilled labour shortage, lower growth rates and an overburdened welfare state.

Yet, empirical findings and theoretical arguments suggest that there will be neither mass unemployment, nor a dramatic skilled labour shortage. Moreover, these two problems will certainly not emerge together. Rather, the decrease in labour demand due to automation will be manageable, and partly absorbed by the simultaneously drop in the labour force. By contrast, increasing income inequality is more likely to become a key isuue.

For several decades, labour market experts and economists have been advocating what now seems to become real: in 2020, Germany’s new immigration act will come into effect. The ‘Skilled Immigration Act’ is supposed to make immigration of qualified, non-EU citizens significantly easier. In the future, qualified workers without academic degrees will have immigration opportunities which were previously open to university graduates only. Moreover, they will no longer be legally at a disadvantage compared to German nationals and EU citizens.

«From now on our nation’s answer to this great social challenge will no longer be a never-ending cycle of welfare: it will be the dignity, the power, and the ethic of work. Today we are taking an historic chance to make welfare what it was meant to be: a second chance, not a way of life…The new bill restores America’s basic bargain of providing opportunity and demanding in return responsibility».

«Would you be willing to donate one of your organs to an organ donation service immediately after your death?». This question was asked to a sample of Europeans through an Internet based enquiry promoted by the European Commission and completed in September 2006. It was included in a survey aimed at identifying the main problems in the area of organ donations and transplantations at the Community level. In 2014, the 2006 survey was followed up by a twin investigation concerning blood, cell and tissue donation.

In the new IREF working paper “Taxing Artificial Intelligences”, Julian Arndts and Kalle Kappner analyse the fiscal implications of the presence of artificial-intelligence (AI) machines in the production processes.

After the incredible Republican presidential primaries opened the path to the surprising, to say the least, Donald Trump Presidency in 2016, today the Democracy Party is involved in a quite similar situation. While three years ago there were 17 candidates at the Republican primaries (5 of them withdrew just before the primaries), now the Democratic Party has reached 25 candidates. Of course, not all of them appear to have a real chance of winning the primaries. Still, according to the latest RealClearPolitics.com survey average, there are at least seven candidates with a percentage larger than 2%. They are Joe Biden, Vice President of the United States under the Obama Presidency; the “eternal” Bernie Sanders; the surging (according to the latest polls) California Senator Kamala Harris; the Massachusetts Senator Elizabeth Warren; the Mayor of South Bend Pete Buttigieg; the media beloved Beto O’Rourke; and, finally, the New Jersey Senator Cory Booker.

Facebook’s greatest recent challenge has been the fading of its brand. A veritable slew of newer social media platforms are cooler and more trendy than Fb, which now languishes in popular esteem as the social platform of choice for the out of touch greying generations, rather than youngsters.
Fb has 3.5 billion customers – half the world’s population. For these reasons, we think that its new currency Libra is interesting. In particular, it shines a light on continuing existential threat to the euro, which is only one of the presumably G7 currencies whose assets will back Libra. Will Libra succeed?

While all of the former socialist economies have liberalised and strengthened their markets over the past two decades, they have failed to strengthen the rule of law (see Table 1). Under socialism, legal systems are not designed to protect the rights of individuals. Instead, they serve the interests of the political elite. To that end, judges, prosecutors, and other judicial officials are trained and expected to cater to those interests. Most worrisome, some of the former socialist economies have even seen the weakening of the rule of law in the last few years.