This paper provides novel empirical results on the welfare impact of sanctions when countries coordinate their sanctions packages. To do so, weconduct simulations with the Caliendo and Parro (2015) CGE model of the world economy that provides changes in welfare under different hypothetical setups of sanctions coalitions. Focusing on the 2012 wave of sanctions against Iran and the 2014 sanctions...
How are individual and collective memories of extreme economic moments produced in a community? How do these memories translate into the political economy and shape the realm of possibility of macroeconomic policies? Why is some statistical data and economic policy represented more factual than other in the historical narration of national economies? How do some economic indicators become more...
As the German economy and the EU are emerging from the COVID-19 pandemic, the focus is shifting to questions of long-term transformation. How can we transform our economies while also limiting climate change and preparing for its impact? The pandemic has accelerated digitalization of German firms and many have already invested to deal with climate change. At the same time, concerns about the...
Whether additional natural gas infrastructure is needed or would be detrimental to achieving climate protection goals is currently highly controversial. Here we combine five perspectives to argue why expansion of the natural gas infrastructure hinders a renewable energy future and is no bridge technology. We highlight that natural gas is a fossil fuel with a significantly underestimated climate impact ...
This paper investigates the dynamic effects of tax changes on the cross-sectional distribution of disposable income in the United States using a narrative identification approach. I distinguish between changes in personal and corporate income taxes and quantify the distributional effects on families and business owners. I document that tax changes affect incomes along the distribution differently and ...
We use the prolonged Greek crisis as a case study to understand how a lasting economic shock affects the innovation strategies of firms in economies with moderate innovation activities. Adopting the 3-stage CDM model, we explore the link between R&D, innovation, and productivity for different size groups of Greek manufacturing firms during the prolonged crisis. At the first stage, we find that the ...
After the end of World War II in 1945, millions of refugees arrived in what in 1949 became the Federal Republic of Germany. We examine their effect on today’s productivity, wages, income, rents, education, and population density at the municipality level. Our identification strategy is based on a spatial discontinuity in refugee settlement at the border between the French and US occupation zones in ...
This paper revives the question of whether a temporary VAT change is an adequate instrument for crisis stabilization. In empirical assessments, we find that durable goods consumption fluctuates strongly over the business cycle and that VAT rate changes affect durable goods in particular. Therefore, we build a dynamic stochastic general equilibrium (DSGE) model that is capable of addressing this major ...