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Policy Contribution

The global decline in the labour income share: is capital the answer to Germany’s current account surplus?

Analysing the major divergences between the three largest euro-area countries in terms of unit labour costs and current accounts, to the broader debate on labour income shares. Data suggests that capital and labour have been complements.

By: and Date: April 26, 2017 Topic: European Macroeconomics & Governance

This paper links the major divergences between the three largest euro-area countries in terms of unit labour costs and current accounts, to the broader debate on labour income shares. The authors show that Germany, like the United States and Japan, has experienced a significant decline in the share of national income that goes to labour. At the same time, labour shares in France and Italy have increased since the beginning of monetary union, breaking a trend that had persisted for several decades. The capital intensity of production has increased much more significantly in France and Italy, while in Germany the capital-to-GDP ratio has stagnated and the net public capital stock has fallen. Our data suggests that capital and labour have been complements.

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Opinion

Fiscal rules and the role of the Commission

The proposals on fiscal frameworks and rules in the recent CEPR Policy Insight on euro-area reform showcase the multiple dimensions of the fundamental dilemmas we are confronted with in the governance of the euro area. This column, part of the VoxEU debate on Euro Area Reform, looks at the challenges to the central role of the Commission that have arisen as the rules-based fiscal framework has been severely compromised.

By: Thomas Wieser Topic: European Macroeconomics & Governance Date: May 22, 2018
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Past Event

Past Event

Youth up Europe: The future of work: towards safeguarding young people's rights in the era of increased digitisation

This event will discuss what impact digitisation will have on the employment opportunities for young people and how we can safeguard their rights.

Topic: European Macroeconomics & Governance, Innovation & Competition Policy Location: Av. Rei Humberto II de Itália, 2750-642 Cascais Date: May 10, 2018
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Blog Post

Germany’s current account surplus and corporate investment

Following the 1990s post-reunification period and since the beginning of monetary union, Germany's current account has grown substantially. In the crisis years, Germany’s lost about 15 percentage points of GDP in its external investments, but the position continues to grow nevertheless. What are the drivers behind Germany’s current account surplus?

By: Guntram B. Wolff Topic: European Macroeconomics & Governance Date: May 9, 2018
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Blog Post

Europe needs a broader discussion of its future

When thinking about what will determine the prosperity and well-being of citizens living in the euro area, five issues are central. This column, part of VoxEU's Euro Area Reform debate, argues that the important CEPR Policy Insight by a team of French and German economists makes an important contribution to two of them, but leaves aside some of the most crucial ones: European public goods, a proper fiscal stance and major national reforms. It also argues that its compromise on sovereign debt appears unbalanced.

By: Guntram B. Wolff Topic: European Macroeconomics & Governance, Finance & Financial Regulation Date: May 4, 2018
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Opinion

Germany’s export-oriented economic model is caught in a US-Chinese squeeze

The new Merkel government has to reduce the dependencies on exports by stimulating domestic growth forces in Germany and Europe. At the same time, Berlin should push for a more ambitious national and European innovation policy as well as a robust European foreign trade policy.

By: Sebastian Heilmann and Guntram B. Wolff Topic: Global Economics & Governance Date: April 30, 2018
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Policy Contribution

Making a reality of Europe’s Capital Markets Union

It is high time to make the CMU project real.The authors of this publication suggest that capital markets will only transform with concrete action and that ESMA reform should be a priority but cannot be the only one. Policymakers need to set priorities that will move the project forward.

By: André Sapir, Nicolas Véron and Guntram B. Wolff Topic: European Macroeconomics & Governance Date: April 27, 2018
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Working Paper

State contingent debt as insurance for euro-area sovereigns

Since the financial crisis, EU countries' economies have recovered to the point that they are exiting their adjustment programmes. Institutional stability mechanisms have been improved at the European level, with the promotion of the banking union and the establishment of a European Monetary Fund, for instance. However, the authors argue that such crisis contingencies should include markets in their risk-sharing, which would require better coordination with institutions.

By: Maria Demertzis and Stavros Zenios Topic: Finance & Financial Regulation Date: April 26, 2018
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Blog Post

Building a stable european deposit insurance scheme

Deposit insurance, like any insurance scheme, raises moral hazard concerns. Such concerns arising from European deposit insurance can be alleviated through a country-specific component in the risk-based premium for deposit insurance and limits on sovereign bond exposures on bank balance sheets. This column argues, however, that proposals to maintain national compartments in a new European Deposit Insurance Scheme are self-defeating, as such compartments can be destabilising in times of crisis.

By: Dirk Schoenmaker Topic: Finance & Financial Regulation Date: April 19, 2018
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Working Paper

The impact of industrial robots on EU employment and wages: A local labour market approach

In theory, robots can directly displace workers from performing specific tasks (displacement effect). But they can also expand labour demand through the efficiencies they bring to industrial production (productivity effect). This working paper adopts the local labour market equilibrium approach developed by Acemoglu and Restrepo to assess which effects dominate and the impact of robots on wage growth and employment rate in Europe.

By: Francesco Chiacchio, Georgios Petropoulos and David Pichler Topic: Innovation & Competition Policy Date: April 18, 2018
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Past Event

Past Event

Robots and artificial intelligence: The next frontier for employment and EU economic policy

This event looked at the impact of robotics and artificial intelligence on employment, wages and EU economic policy.

Speakers: Pat Bajari, Julia Bock-Schappelwein, Anna Byhovskaya, Paola Maniga, Mario Mariniello, Clara Neppel, Loukas Stemitsiotis, Georgios Petropoulos and Barry O’Sullivan Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 18, 2018
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Blog Post

The debate on euro-area reform

A paper jointly written by 14 French and German economists set off a debate about the reform of euro-area macroeconomic governance. We review economists’ opinions about it.

By: Silvia Merler Topic: Finance & Financial Regulation Date: April 16, 2018
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Blog Post

The European Globalisation Adjustment Fund: Time for a reset

It is only in the last decade that the EU has had an active policy to reintegrate workers who lost their jobs as a result of globalisation, through the European Globalisation Adjustment Fund (EGF). In this blog, the authors assess the performance of the Fund and make three recommendations to improve its effectiveness. To be more successful, the Fund should improve its monitoring and widen the scope of its usage.

By: Grégory Claeys and André Sapir Topic: European Macroeconomics & Governance Date: April 11, 2018
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