Am 13. Februar 2025 wurde der zweite Zwischenbericht zur begleitenden Evaluierung des Investitionsgesetzes Kohleregionen (InvKG) und des STARK-Bundesprogramms von den Wirtschaftsforschungsinstituten IWH und RWI veröffentlicht. Die Evaluierung, die im Auftrag des Bundesministeriums für...

Many governments still help to keep fossil fuels cheap - sometimes by directly paying part of the supply cost (explicit subsidies), and at other times by not including the hidden costs of pollution and health problems they cause in their price (implicit subsidies). But what is the true cost to...

In many countries, subsidies towards higher education and financial aid to students from poorer backgrounds have reduced socio-economic status (SES) gaps in undergraduate study. The increasing importance of graduate studies that are typically more expensive may, however, provide a new avenue for...

The level of government support significantly influences the performance of European railways. However, prior analyses have largely focused on the sector as a whole, neglecting the distribution of public budget contributions between the upstream infrastructure manager and downstream service...

We construct a New-Keynesian E-DSGE model with energy disaggregation and financial intermediaries to show how energy-related fiscal and macroprudential policies interact in affecting the euro area macroeconomy and carbon emissions. When a shock to the price of fossil resources propagates through...

This research estimates by how much the NCS reduces childcare costs for families who use formal childcare in Ireland. The cost 'coverage' of the subsidy, measured by the ratio of the subsidy to the total cost of care, is estimated using the microsimulation model, SWITCH, linked to 2022 data from...

The distributional and disruptive effects of energy supply shocks are potentially large. We study the effectiveness of alternative fiscal responses in a two-country HANK model calibrated to the euro area. Subsidies can stabilize the domestic economy, but they are fiscally costly and generate...

The Covid-19 pandemic caused a global economic crisis, leading governments to provide substantial State Aid to support firms. This paper examines the effectiveness of Covid-related financial support in Spain and Italy, focusing on its impact on firm recovery. Using a difference-in-differences...

Industrial policies are widespread, but evidence on their workforce effects remains limited. We present novel evidence on the impact of EU technology subsidies on employment and skill demand in Finnish SMEs, 1994-2018. The subsidies fund new machinery, including robots and CNC machines....

This study examines how policies affecting the cost of using fossil fuels in production influence comparative advantage in the industrial sector. Firstly, we use a fixed-effects gravity model to estimate the export capabilities that determine comparative advantage. Subsequently, using data on...

We examine the welfare effects of removing explicit and implicit fossil fuel subsidies, the latter entailing Pigouvian pricing of local externalities from fossil energy consumption. We map a multi-region, multi-sector general equilibrium model to granular data on subsidies, local marginal...

Oil price increases that began in late 2020 led to a global proliferation of liquid fuel subsidies and price controls as governments tried to reduce, redistribute, or delay the impact of rising and volatile energy prices on consumers. This paper draws on a unique database to analyze the...

Oil price increases that began in late 2020 have led to a global proliferation of liquid fuel subsidies and price controls, as governments sought to reduce, redistribute, or delay the impact of rising and volatile energy prices on consumers. This report draws on two new global databases...

Using Chinese firm-level trade data combined with global anti-dumping (AD) and countervailing duty (CVD) investigations, we uncover a previously overlooked cost of industrial policy under WTO agreements. At every stage of AD/CVD investigation, subsidies significantly raise the probability of...

We analyze the equilibrium effects of different subsidies on target goods under both perfectly competitive and monopolistic market structures. We concentrate our analysis on three particularly common forms of subsidies: (i) a per-unit subsidy, (ii) an ad valorem subsidy, and (iii) an "inversely...

We analyse the long-term impact of hiring subsidies on both job and employment security. The subsidy that we examine was introduced in Italy through the 2015 Budget Law, with the goal of promoting open-ended contracts. We employ a non-linear difference-in-differences (NL-DiD) approach within a...

In the period March 2022 to June 2024, nearly €796 billion of aid was approved either under the Temporary Crisis and Transition Framework or directly under the Treaty and based on TCTF principles. Around €219 billion was actually granted to companies, representing 27% of the aid approved and...

The objective of this paper is to gain insight in and compare the macroeconomic effects of increasing wage subsidies for researchers in Belgium in different industries. Starting from the observation that the implicit wage subsidy rate for R&D workers is not distributed evenly across industries,...

A significant proportion of investments involving public procurement and state aid are still to be implemented over the remaining duration of the RRF. Non-compliance with public procurement and state aid rules is a perennial problem in EU budget expenditure. In this audit we examined the RRF...

A significant proportion of investments involving public procurement and state aid are still to be implemented over the remaining duration of the RRF. Non-compliance with public procurement and state aid rules is a perennial problem in EU budget expenditure. In this audit we examined the RRF...

The European Union's industrial policy has gained renewed significance in response to geopolitical shifts, intensifying global competition, and the twin digital and green transitions. This paper analyses the coinciding role that EU State aid law plays as a coordinating instrument for EU...

This article estimates the impact of government subsidies on productivity growth in South Africa, joining the ongoing debate among economists regarding the effectiveness of subsidies as a driver of industrial productivity. While some argue that subsidies address market failures, facilitate R&D,...

The global transition to renewable energy is essential for long-term sustainable development and climate change mitigation. Hybrid Renewable Energy Systems (HRES) offer a viable solution for reducing carbon emissions, increasing energy security, and providing reliable electricity. This study...

The level of government support significantly influences the performance of European railways. However, prior analyses have largely focused on the sector as a whole, neglecting the distribution of public budget contributions between the upstream infrastructure manager and downstream service...

The purpose of this study is to examine the relationship between public opinion of science and technology (S&T), government support to the Artificial intelligence (AI) sector, and AI startups across countries. By controlling for other macro determinants of business formation and applying OLS,...

This paper analyses the impact of carbon pricing on residential heating affordability using a theoretical household model with endogenous choice of a renewable heating technology. We compare two compensation policies: a renewable heating subsidy and a lump-sum transfer. The subsidy is the most...

This report estimates fuel-specific TCPs for 11 LAC countries-Argentina, Brazil, Chile, Colombia, Dominica, Jamaica, Mexico, Paraguay, Peru, St. Lucia, and Uruguay-from 2017 to 2023, and a preliminary estimate for 2024 is also constructed. TCPs in this report are built using a detailed bottom-up...

The paper assesses the geographical distribution at NUTS2-level of European Union-funded investments related to artificial intelligence (AI) during the programming period 2014-2020. It also examines the relationship between this specialization pattern and regional characteristics using a spatial...

Many public-private partnership (PPP) projects in China are facing increased fiscal expenditure responsibilities and weakened fiscal capacity, which may hinder investment in corporate innovation. Using data from Chinese prefecture-level cities and listed firms from 2014 to 2020, we find that PPP...

Industrial policies have been on the rise with subsidies provided to firms accounting for the lion's share of interventions. The effects of these measures on productivity, trade, investment and other economic and non-economic variables are largely an open question. This paper examines...

In this paper, we assess electric vehicle (EV) tax credits in the US Inflation Reduction Act (IRA), the largest significant action in favour of climate change in US history. We find that the provisions of the IRA have so far done little to increase the uptake of EVs by US households, accounting...