Greetings from the New Editor
Dear readers, my name is Andrea Balestracci, and I am delighted to introduce myself as the new Program Director of EconPol Europe at CESifo. It is with great pleasure that I take on the role of editor for this newsletter. My goal is to keep you informed, inspired, and engaged with the latest developments in our network. I warmly invite you to reach out with any questions, feedback, or ideas regarding CESifo’s work – your input is always welcome.
Thank you for reading, and I hope you enjoy this edition!
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Three Theories of Natural Rate Dynamics
Galo Nuño
The current context of geopolitical and military tension in Ukraine and the Middle East and the trade tensions caused by the US administration's aggressive stance have made it urgent for Europe to assess its resilience – in economic, industrial, and security terms. The debate on such shocks – war and tariffs – has been less concerned with their effect on interest rates, and particularly the natural rate of interest.
This, according to a traditional view, depends primarily on structural factors. This Working Paper – the top download of the last three months – challenges this view by considering theories linking the natural rate to three elements: fiscal policy, via the stock of risk-free assets; monetary policy, via the central bank inflation target; persistent supply shocks, such as tariffs or wars, indeed.
As the paper points out, the concept of natural rate is important in macroeconomics in that – among other reasons – it is a benchmark for the monetary policy stance in the long run. If fiscal policy and persistent shocks shift the natural rate, the monetary policy stance, including the long end of the risk-free yield curve, can change abruptly due to factors outside the central bank's control.
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Building Confidence
Business sentiment among German companies has improved for the sixth consecutive month, with the ifo Business Climate Index rising from 87.5 in May to 88.4 in June. Expectations brightened across sectors, particularly in services and construction. Despite the growing optimism, current business performance remained mixed, especially in manufacturing and retail. This steady upward trend reflects growing confidence in the German economy, even though companies remain dissatisfied with their order volumes and retail sales, and rather pessimistic about exports.
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Venice Summer Institute 2025
23 – 26 June 2025
From June 23 to 26, in the stunning setting of San Servolo in Venice, the CESifo Venice Summer Institute 2025 took place. The annual event, organized by CESifo in cooperation with Venice International University, explored topics of international economic policy relevance, thanks to high-profile academic speakers and participants. Facilitated by the venue, the workshops were a fantastic opportunity for researchers to network and exchange valuable feedback on their research projects.
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Big Data in Urban Economics
Big data and rising computing power are an increasingly powerful tool for economic geography and urban economics. The workshop took stock of current research and future prospects in the area.
Keynote Speakers: Costas Arkolakis (Yale University) and Eleonora Patacchini (Cornell University). Organizers: Oliver Falck (ifo Institute, LMU Munich) and Yanos Zylberberg (University of Bristol).
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Digital Healthcare
Digital transformation has greatly affected healthcare in recent years, with the introduction of numerous new tools and approaches. But how can we make the most of these new technologies? What advantages and challenges does their adoption entail?
Keynote Speakers: Jonathan Kolstad (University of California, Berkeley) and Carol Propper (Imperial College London). Organizers: Joachim Winter (LMU Munich) and Ariel Stern (Hasso Plattner Institute, University of Potsdam).
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80th Economic Policy Panel: Reducing Conflict and Improving Performance in the Economy
We are delighted to have hosted the 80th Economic Policy Panel as part of VSI 2025. The focal and (regrettably) timely theme was conflict, its types and causes, but above all how, based on an understanding of these, to design and enforce optimal policies to reduce conflict in its various forms.
The panel was organized in collaboration with ReCIPE and CEPR, and the papers presented will be published in a special issue of the journal Economic Policy entitled Economic Policies for Peace. The recordings of both sessions are available here.
The journal Economic Policy is jointly owned by CEPR, SciencePo and CESifo.
Organizers: Dominic Rohner (HEC Lausanne) and Oliver Vanden Eynde (Paris School of Economics).
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The Regulation of Multi-Firm Groups: Combining Advances from Trade and Public Economics
The Global Minimum Tax on multinational corporations was a point of contention at the recent G7 summit. Possible relocation decisions represent one of the gambles on which the US administration's current tariff and tax policy is based – and one of the consequences feared by European governments. The role of pivotal multi-firm groups in shaping global trade, taxation, and regulation was explored in this workshop.
Keynote Speakers: Teresa Fort (Tuck School of Business at Dartmouth) and Mathieu Parenti (Paris School of Economics. Organizers: Martina Magli (LMU Munich), Jakob Miethe (LMU Munich), and Juan Carlos Suaréz (Stanford University).
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Poverty, Persistence and Policy: Comparative Development and the Deep Roots of Prosperity
Why do some regions and countries achieve prosperity while others remain in poverty? Thanks to the availability of new data and methodologies, the search for an answer to this question is becoming increasingly quantitative and interdisciplinary – and so is research: this workshop discussed and shared new insights gathered at its forefront.
Keynote Speakers: Paola Giuliano (University of California, Los Angeles) and Alberto Bisin (New York University). Organizers: Sascha O. Becker (University of Warwick), Uwe Sunde (LMU Munich), and Hans-Joachim Voth (University of Zurich).
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Digital Platforms: Policy and Politics
This workshop focused on recent advances in research on the design, regulation, and benefits of digital platforms, as well as their social consequences. The trade-off between civil liberties on the one hand and user welfare on the other seems to be a conundrum for policymakers. This workshop has offered valuable insights for addressing it.
Keynote Speakers: Ruben Durante (National University of Singapore) and Maria Petrova (Universitat Pompeu Fabra). Organizers: Annalí Casanueva Artís (ifo Institute) and Mateusz Stalinski (University of Warwick and CAGE).
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Journal of International Economics Summer School
16 – 18 July 2025
We are extremely proud to be currently hosting the Journal of International Economics (JIE) Summer School, featuring a series of lectures by leading faculty in international economics.
The local academic hosts are Claudia Steinwender (LMU Munich), Carsten Eckel (LMU Munich), and Lisandra Flach (ifo Institute).
The instructors are: Treb Allen (Dartmouth), Luigi Bocola (Stanford University), Alessandro Dovis (University of Pennsylvania), Isabelle Mejean (Sciences Po), Liliana Varela (LSE), Daniel Xu (Duke University).
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Munich Economic Debate: Migration and Democracy - A Challenge for Politics?
21 July 2025 18:00 – 19:30
Chamber of Industry and Commerce for Munich and Upper Bavaria, Max-Joseph-Str. 2, 80333 Munich
Just a few days to go until the next MED appointment. Gerald Knaus, co-founder and president of the think tank European Stability Initiative (ESI), will give a lecture on the lessons that European history has to offer for shaping today's policies and for a much-needed new vision of today's Europe, centered on human rights, the rule of law, and peace. We very much look forward to your participation!
Moderator: Lisa Nienhaus, Süddeutsche Zeitung
The presentation will be held in German and will be livestreamed here. Please register to the event using this link.
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CESifo Area Conference on Economics of Education
5 – 6 September 2025
Area Directors and Scientific Organizers: Rick Hanushek (Hoover Institution) and Ludger Woessmann (ifo Institute)
Keynote Speaker: Raffaela Sadun (Harvard Business School)
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15th ifo Conference on Macroeconomics and Survey Data
17 – 18 October 2025
Scientific Organizers: Benjamin Born (Frankfurt School of Finance & Management), Sebastian Link (LMU Munich/ifo Institute), Andreas Peichl (LMU Munich/ifo Institute), Klaus Wohlrabe (ifo Institute), Timo Wollmershäuser (LMU Munich/ifo Institute), and Maik Wolters (University of Kiel)
Keynote Speakers: Olivier Coibon (University of Texas, Austin) and Sarah Lein (University of Basel)
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CESifo Area Conference on Behavioral Economics
24 – 25 October 2025
Area Directors and Scientific Organizers: Ernst Fehr (University of Zurich) and Klaus Schmidt (LMU Munich)
Keynote Speakers: Gilat Levy (London School of Economics) and Ben Enke (Harvard University)
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19th Workshop on Political Economy
28 – 29 November 2025
Scientific Organizers: Christian Lessmann (TU Dresden), Gunther Markwardt (BTU Cottbus-Senftenberg), and Niklas Potrafke (ifo Institute)
Keynote Speakers: Sascha O. Becker (Warwick University) and Ruben Enikolopov (Barcelona School of Economics)
Submit a paper here. Deadline for submissions: 5 October 2025
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EconPol Annual Conference 2025: Adaptation to Climate Change
Brussels, 19 May 2025
The 2025 EconPol Annual Conference was a great success. Above all, at a time marked by conflict and geopolitical tensions, it helped to keep the spotlight on the unavoidable need for climate adaptation. The heat wave hitting Europe at the end of June provided further proof of this, if any more were needed.
For those interested, links to video recordings of the keynote speech and panel discussions are available below, as well as the latest EconPol publications on the topic.
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Impressions from the Conference
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Panel A: Building a Climate-Resilient EU
Panelists: Nicolas Jeanmart (Head of Personal and General Insurance, Insurance Europe); Blaž Kurnik (Head of Climate Change Impacts and Adaptation – European Environment Agency); Karen Pittel (Director – ifo Center for Energy, Climate, and Ressources, ifo Institute & LMU Munich; CESifo Fellow); Frank Venmans (Associate Professor – Grantham Institute, London School of Economics).
Watch the video highlights here.
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Panel B: Adaptation to Climate Change in Developing Countries
Panelists: Andrei Marcu (Executive Director – European Roundtable on Climate Change & Sustainable Transition); Johan Swinnen (Director General – International Food Policy Research Institute); Maria Waldinger (Professor of Economics & Sustainable Economic Policy, KU Eichstätt-Ingolstadt and Research Professor, ifo Center for Labor and Demographic Economics; CESifo Affiliate).
Watch the video highlights here.
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Panel C: Migration as a Coping Strategy
Panelists: Ibrahima Amadou Dia (Director – African Centre for the Study and Research on Migration, African Union); Francesco Luciani (Head of Unit – "Migration & Forced Displacement”, DG INTPA, European Commission); Orlane Mathieu Maincent (Humanitarian Programme Development, Migration & Climate Change/Disaster – IOM, UN Migration); Panu Poutvaara (Director – ifo Center for Migration and Development Economics, ifo Institute & LMU Munich; CESifo Fellow).
Watch the video highlights here.
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EconPol & IEP@BU Debate: Funding Ideas, Not Companies
Brussels, 3 July 2025
While industrial competitiveness is back at the top of the EU agenda, Europe's high-tech industries are lagging behind global competition. To break out of the middle-technology trap, Europe desperately needs to redirect its R&D resources from large companies and consortia to small and medium-sized companies with greater innovation potential.
This is the conclusion of a report co-published by EconPol Europe and the Institute for European Policymaking (IEP) at Bocconi University. Under the study's lens is the EU Horizon program, worth approximately EUR 100 billion of R&D funding. According to their findings, the co-authors – ifo President Clemens Fuest and IEP Director Daniel Gros – conclude that the program needs to be completely realigned if it is to contribute to the goal of strengthening Europe's innovative power.
The study, entitled "Funding Ideas, Not Companies: Rethinking EU Innovation Policy from the Bottom Up", was presented in Brussels on July 3. The presentation was followed by comments by Marc Lemaitre (Director General for Research and Innovation) and Dagmar Schuller (CEO and Co-Founder, audEERING) and by a concluding Q&A session.
The full report is available here.
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Trump's Fiscal Policy Is Built on Sand
With its tariffs, the US administration plans to reduce the burden on the federal budget and cut the income tax. But is the underlying assumption of higher net tax revenues solid? Clemens Fuest tells why, according to recent estimates, this may be not the case.
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EconPol Forum 03/2025: A Fast Track to Defense Sovereignty in the EU – How Can It Work?
The US-EU partnership suffered a severe blow at the beginning of Donald Trump's second term, with US military support for Ukraine now being used to exert pressure on a controversial peace agreement. Doubts are growing about the US's long-term commitment to European security, even within NATO, highlighting the urgent need for the EU to develop its own defense capabilities.
The next issue of EconPol Forum seeks to pin down the path towards European defense sovereignty. It does so by exploring a wide range of actionable policy areas and challenges: from public involvement to the operational frameworks necessary for a defense union, from R&D investment to the feasibility of the different financing instruments, from short-term solutions to long-term paths for a common European defense treaty.
The journal issue will be published on July 31.
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During the 2025 ifo Annual Meeting on June 3, the award ceremony for the following ifo employees and their publications was held. The video of the ceremony can be watched here.
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Roland Berger Outstanding Publication Award
Alexandra Friedl's paper “The Climate in Climate Economics”, co-authored by Felix Kübler, Simon Scheidegger, and Doris Folini, has won the 2024 Roland Berger Outstanding Publication Award. Congratulations!
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ifo Outstanding Publication Award
The following authors and publications have been awarded with the ifo Outstanding Publication Award. Congratulations!
Henning Hermes, co-authored by Eva Berger, Ernst Fehr, Daniel Schunk, and Kirsten Winkel. “The Impact of Working Memory Training on Children's Cognitive and Noncognitive Skills”
Henning Hermes, co-authored by Philipp Lergetporer, Frauke Peter, and Simon Wiederhold. “Application Barriers and the Socioeconomic Gap in Child Care Enrollment”
Anna Kerkhof, “Advertising and Content Differentiation: Evidence from YouTube”
Sebastian Link and Manuel Menkhoff, co-authored by Andreas Peichl. “Downward Revision of Investment Decisions after Corporate Tax Hikes”
Sebastian Link, “The Price and Employment Response of Firms to the Introduction of Minimum Wages”
Cäcilia Lipowski, co-authored by Coauthors Melanie Arntz, Guido Neidhöfer, and Ulrich Zierahn-Weilage. “Computers as stepping stones? Technological change and equality of labor market opportunities”
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Jan Stuhler, Universidad Carlos III de Madrid, is visiting CES 1 Jul – 22 Aug 2025
Alessandro Tavoni, University of Bologna, is visiting CES 7 – 25 Jul 2025
Aniko Öry, Carnegie Mellon University, is visiting CES 7 Jul – 1 Aug 2025
Peter M. Morrow, University of Toronto, is visiting CESifo 12 – 26 Jul 2025
Martin Christopher Hänsel, Leipzig University, is visiting CESifo 21 – 25 Jul 2025
Gregor Pfeifer, University of Sydney, is visiting CES 23 Jul – 31 Dec 2025
Andreas Grunewald, Frankfurt School of Finance and Management, is visiting CES 24 Jul – 3 Aug 2025
Christoph Boehm, University of Texas, is visiting CES 4 Aug 2025 – 31 Jul 2026
Nitya Pandalai-Nayar, University of Texas, is visiting CES 4 Aug 2025 – 31 Jul 2026
Eric A. Hanushek, Stanford University - Hoover Institution, is visiting CESifo 31 Aug – 7 Sep 2025
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The Bulletin Board is where CESifo network members can post news and messages regarding conferences, workshops and journals that are of interest to the research community and to all CESifo Newsletter readers. If you have anything you would like to share, please feel free to contact us at services@cesifo.de.
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81st Annual Congress of the International Institute of Public Finance
Nairobi, 20 – 22 August 2025
Economic development depends heavily on a state's ability to design and enforce policies effectively and efficiently. Recent research focuses on how capacity constraints and institutional factors influence policy outcomes. The 2025 IIPF Annual Congress will feature cutting-edge contributions from this field, which explore the role of technology, citizen trust, and collaborations between researchers and policymakers – among other factors – in overcoming these constraints.
Keynote Speakers: Niels Johannesen (Oxford University), Oyebola Okunogbe (World Bank), Ravi Kanbur (Cornell University), and Rema Hanna (Harvard University)
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In order to provide you with more transparent and clear information on how we process your personal information, we have divided our privacy policy into various chapters. In this description you will find information on the basis on which the data is stored and how we use the data. You can also find out more about your rights, such as how to access your information and how to restrict the use of your information. Our privacy policy can be found on our website.
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Provider
CESifo GmbH
Poschingerstr. 5
81679 Munich, Germany
Registered with the Munich District Court (Amtsgericht München) under HRB 125257
Managing Director
Prof. Dr. Dr. h.c. Clemens Fuest
VAT ID: DE218182755
Editor
Andrea Balestracci
The reprint of excerpts from this newsletter is permitted only with written permission and provided that the source is acknowledged.
© 2025 CESifo GmbH
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