Bruno Merlevede, Victoria Purice, 29 March 2019

Supplying inputs to multinational firms has been shown to increase the productivity of domestic firms, while borders have been shown to substantially reduce trade activities. This column investigates whether spillover effects from multinationals on local firms occur when firms are separated by a national border. Using data for seven Central and Eastern European countries and their neighbours, it finds that cross-border spillovers only occur after EU integration, and that participation in the Schengen Area magnifies these effects. The results bear testimony to successful EU integration and warn about potential productivity costs to local firms should border controls be reinstated.

Gabriel Felbermayr, Jasmin Gröschl, Thomas Steinwachs, 27 April 2016

The refugee crisis has placed Europe’s Schengen Agreement under stress, with some calling for the reintroduction of identity checks and other border controls. This column presents new estimates of the potential costs of such controls. On average, the removal of controls at one border acts like the removal of a 0.7% tariff. The controls currently notified to the EU Commission could lower EU GDP by around €12.5 billion. The full demise of Schengen would be about three times as costly.

Scott Baker, Nicholas Bloom, Steven Davis, 15 December 2015

The recent influx of refugees to Europe has stoked security fears and created anxiety about the social and economic consequences. This column provides new quantitative indicators for the intensity of migration-related fears and policy uncertainty, based on newspaper articles. The indices are presented for the US, UK, France, and Germany, and extend back to 1995. They show that recent levels of concern and uncertainty in European countries about migration are unprecedented. 

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