Peter Egger, Nicole Loumeau, 16 January 2019

Innovative activity is unevenly distributed geographically, with regional characteristics such as global market accessibility or an innovation-promoting policy environment affecting the spatial distribution. Using global data on regional characteristics, regional patenting output, and innovation-promoting policy environments, this column examines the origins of innovation clusters, and particularly the role of R&D tax policy instruments, in attracting innovative firms. It estimates that innovation-promoting R&D tax policy instruments contribute to about one-tenth of the long-term economic growth around the globe.

Jeffrey Frankel, 22 December 2018

Pedro Teles, 17 December 2018

Pedro Teles of Universidade Católica Portuguesa and Bank of Portugal discusses ADEMU work on tax policies.

James Cloyne, Nicholas Dimsdale, Natacha Postel-Vinay, 02 November 2018

The austerity, low interest rates, and sluggish growth in Britain between the two World Wars mirror today's economic circumstances. The column investigates the causal impact of tax changes on growth at the time. A 1% cut in taxes raised GDP by between 0.5% and 1% on impact, and by more than 2% over two years. This suggests that tax changes had an important macroeconomic impact and have the potential to generate similar effects today.

Sven Langedijk, Gaëtan Nicodème, Andrea Pagano, Alessandro Rossi, 04 July 2015

Strengthening the banking sector through higher equity capital is one of the key elements of policies aiming to reduce the probability of crises. However, the ‘corporate debt bias’ – the tendency of corporate tax systems to favour debt over equity – is at odds with this objective. This column estimates the benefits for financial stability of eliminating the corporate debt bias. Fully removing the debt bias is estimated to reduce potential public finance losses by between 25 and 55% for the six large EU countries sampled. 

Alexander Gelber, Joshua Mitchell, 11 January 2010

When single women enter the labour force, how do their lifestyles change? This column shows that work in the market substitutes for work at home. For every additional hour that a single woman spends working in the market in response to a change in tax policy, she spends about 40 fewer minutes working at home.

Gilbert Metcalf, 26 January 2009

This column explains how US tax policies have induced greater investment in renewable energy production and an electricity grid unable to harness it. It argues for a tax code that offers financial incentives to make new grid investments, lest the US find itself with a power grid that can't transport green electricity to the nation's growth centres – the ultimate bridge to nowhere.

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