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on European Economics |
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Issue of 2025–12–01
sixteen papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Luis Herrera (BANCO DE ESPAÑA); Mara Pirovano (EUROPEAN CENTRAL BANK); Valerio Scalone (EUROPEAN CENTRAL BANK) |
| Abstract: | This paper introduces the Risk-to-Buffer approach for calibrating the countercyclical capital buffer (CCyB), with a particular emphasis on the positive neutral (PN) CCyB rate, tailored to the euro area. The proposed methodology is applied in both a dynamic stochastic general equilibrium (DSGE) framework and a macroeconomic time series setting. It estimates the amplification of adverse shocks under varying levels of cyclical systemic risk and calibrates the CCyB to counteract these amplification effects. Using data from 2009 to 2023, the analysis suggests a positive neutral CCyB rate for the euro area ranging between 1% and 1.5%. The findings indicate that output and inflation shocks, which are not directly linked to the materialization of domestic systemic risk, and high degrees of trade openness, warrant a more prominent role of the PN CCyB in the overall CCyB calibration. The exercise to illustrate the methodology is carried out for the euro area. While national calibrations require additional exercises, this approach offers a flexible and complementary framework that can support and enhance national-level analyses. |
| Keywords: | financial stability, macroprudential policy, capital requirements, countercyclical capital buffer |
| JEL: | C32 E51 E58 G01 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2544 |
| By: | Mongelli Ignazio (European Commission - JRC); Avila Uribe Antonio (European Commission - JRC); Maes Joachim; Duran Laguna Jorge; Feyen Luc (European Commission - JRC); Ciscar Martinez Juan Carlos (European Commission - JRC) |
| Abstract: | This report examines the magnitude and geography of the economic consequences of climate risks in European NUTS3 regions using a new regional economic growth model that accounts for spatial spillover effects. The assessment, based on the JRC PESETA V project, focuses on a 2⁰C scenario of global warming by 2050 and considers seven climate impact categories: labor productivity, droughts, coastal flooding, river flooding, storms, wildfires and transport infrastructure. By 2050, the 2°C global warming scenario could result in an average 0.7% EU GDP loss (0.8% EU consumption loss), accumulating to an undiscounted €2.5 trillion in GDP losses, highlighting a significant economic burden. The results also indicate that there is a large spatial asymmetry in climate risks, affecting more regions in Southern and Eastern European countries (Greece, Cyprus, Croatia, Portugal, Spain and Italy). Northern European regions are more vulnerable to river and coastal flooding, while Southern and Eastern European regions are disproportionately affected by productivity losses, droughts and coastal flooding. The current allocation of European cohesion funds partially mitigates this asymmetric pattern of climate risks. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc143093 |
| By: | José García Revelo; Jean-Guillaume Sahuc; Grégory Levieuge |
| Abstract: | The European Central Bank and the Federal Reserve introduced new policy instruments and made changes to their operational frameworks to address the global financial crisis (2008) and the Covid-19 pandemic (2020). We study the macroeconomic effects of these monetary policy evolutions on both sides of the Atlantic Ocean by developing and estimating a tractable two-country dynamic stochastic general equilibrium model. We show that the euro area and the United States faced shocks of different natures, explaining some asynchronous monetary policy measures between 2008 and 2023. However, counterfactual exercises highlight that all conventional and unconventional policies implemented since 2008 have appropriately (i) supported economic growth and (ii) maintained inflation on track in both areas. The exception is the delayed reaction to the inflationary surge during 2021-2022. Furthermore, exchange rate shocks played a significant role in shaping the overall monetary conditions of the two economies. |
| Keywords: | Monetary Policy, Real Exchange Rate Dynamics, Two-Country DSGE Model, Bayesian Estimation, Counterfactual Exercises |
| JEL: | E32 E52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1018 |
| By: | Esteban García-Miralles (BANCO DE ESPAÑA); Maximilian Freier (EUROPEAN CENTRAL BANK); Sara Riscado (OECD); Chrysa Leventi (EUROPEAN COMMISSION); Alberto Mazzon (EUROPEAN COMMISSION); Glenn Abela (CENTRAL BANK OF MALTA); Laura Boyd (CENTRAL BANK OF IRELAND); Baiba Brusbarder (LATVIJAS BANKA); Marion Cochard (BANQUE DE FRANCE); David Cornille (NATIONAL BANK OF BELGIUM); Emanuele Dicarlo (BANCA D’ITALIA); Ian Debattista (CENTRAL BANK OF MALTA); Mar Delgado-Téllez (BANCO DE ESPAÑA); Mathias Dolls (IFO INSTITUTE); Ludmila Fadejeva (LATVIJAS BANKA); Maria Flevotomou (BANK OF GREECE); Florian Henne (BANQUE CENTRALE DU LUXEMBOURG); Alena Harrer-Bachleitner (OFFICE OF THE AUSTRIAN FISCAL COUNCIL); Viktor Jaszberenyi-Kiraly (MAGYAR NEMZETI BANK); Max Lay (IFO INSTITUTE); Laura Lehtonen (DE NEDERLANDSCHE BANK); Mauro Mastrogiacom (DE NEDERLANDSCHE BANK); Tara McIndoe-Calder (CENTRAL BANK OF IRELAND); Mathias Moser (OESTERREICHISCHE NATIONALBANK); Martin Nevicky (NATIONAL BANK OF SLOVAKIA); Andreas Peichl (IFO INSTITUTE); Myroslav Pidkuyko (BANCO DE ESPAÑA); Mojca Roter (BANKA SLOVENIJE); Frédérique Savignac (BANQUE DE FRANCE); Andreja Strojan Kastelec (BANKA SLOVENIJE); Vaidotas Tuzikas (LIETUVOS BANKAS); Nikos Ventouris (BANK OF GREECE); Lara Wemans (BANCO DE PORTUGAL) |
| Abstract: | This paper presents a comprehensive characterization of “fiscal drag” —the increase in tax revenue that occurs when nominal tax bases grow but nominal parameters of progressive tax legislation are not updated accordingly— across 21 European countries using a microsimulation approach. First, we estimate tax-to-base elasticities, showing that the progressivity built in each country’s personal income tax system induces elasticities around 1.7-2 for many countries, indicating a potential for large fiscal drag effects. We unpack these elasticities to show stark heterogeneity in their underlying mechanisms (tax brackets or tax deductions and credits), across income sources (labor, capital, self-employment and public benefits), and across the individual income distribution. Second, we extend the analysis beyond these elasticities to study fiscal drag in practice between 2019 and 2023, incorporating observed income growth and legislative changes. We quantify the actual impact of fiscal drag and the extent to which government policies have offset it, through either indexation or other reforms. Our results provide new insights into the fiscal and distributional effects of fiscal drag in Europe, as well as useful statistics for modeling public finances. |
| Keywords: | personal income tax, inflation, indexation, bracket creep |
| JEL: | D31 H24 E62 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2545 |
| By: | Olivier De Jonghe (National Bank of Belgium); Konstantīns Benkovskis (Latvijas Banka); Karolis Bielskis (Bank of Lithuania); Diana Bonfim (Banco de Portugal, Católica Lisbon School of Business & Economics); Margherita Bottero (Banca d’Italia); Tamás Briglevics (Central Bank of Hungary); Martin Cesnak (National Bank of Slovakia); Mantas Dirma (Bank of Lithuania); Marina Emiris (National Bank of Belgium); Pálma Filep-Mosberger (Central Bank of Hungary); Valentin Jouvanceau (Bank of Lithuania); Nicholas Kaiser (Central Bank of Ireland); Dmitry Khametshin (Banco de España); Viola M. Grolmusz (Central Bank of Hungary); Laura Moretti (Central Bank of Ireland); Artūrs Jānis Nikitins (Latvijas Banka); Angelo Nunnari (Banca d’Italia); Maria Rodriguez Moreno (Banco de España); Elitsa Stefanova (European Central Bank); Lajos Tamás Szabó (Central Bank of Hungary); Kārlis Vilerts (Latvijas Banka); Sujiao Emma Zhao (Banco de Portugal, Católica Lisbon School of Business & Economics) |
| Abstract: | We study heterogeneity in households’ credit across nine European countries (Belgium, Spain, Hungary, Ireland, Italy, Latvia, Lithuania, Portugal, and Slovakia) during 2022-2024 using granular credit register data. We first document substantial between- and within-country variation in mortgage and consumer lending by borrower age, loan maturity, and interest rate fixation. We then quantify the pass-through of the ECB’s recent tightening cycle to household borrowing costs and assess its heterogeneous impact across households. Pass-through is nearly complete for mortgages (around 0.9) but considerably weaker for consumer credit (around 0.4). While mortgage pass-through is relatively homogeneous across countries, consumer credit shows pronounced cross-country differences that cannot be explained by borrower or loan characteristics. Younger households face stronger mortgage pass-through but weaker consumer credit pass-through relative to older borrowers, and longer maturities are associated with stronger pass-through in both credit markets. |
| Keywords: | monetary policy transmission; household borrowing; credit registers; interest rate pass through; cross-country heterogeneity. |
| JEL: | E52 G21 D14 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202511-485 |
| By: | Kéa Baret; Frédérique Bec; Marion Cochard |
| Abstract: | We propose a simple, simulation based framework for stochastic debt sustainability analysis. Estimating a parsimonious vector autoregression (frequentist and Bayesian) on quarterly French data (1990:Q1–2023:Q4) for the debt's key drivers, we generate predictive fan charts and probability statements for debt to GDP outcomes. Median VAR projections are close to a hypothetical deterministic baseline derived from the deterministic debt sustainability analysis framework. Assuming this illustrative central scenario, historical relationships estimated by our VAR models imply a corresponding confidence band around the debt trajectory. The BVAR yields slightly wider cones and lower tail probabilities than the frequentist VAR, with cone widths between those reported by the European Commission and the ECB. Our analysis, which does not reflect the most recent developments in public finance, suggests that an ambitious fiscal consolidation effort would be required to materially enhance the prospects of stabilizing the debt-to-GDP ratio over the medium term. |
| Keywords: | Debt Sustainability, Stochastic Analysis, VAR Model, Bayesian Forecasting, Density Forecasts |
| JEL: | C3 E6 H6 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1019 |
| By: | Byrne, Stephen (Central Bank of Ireland); Goodhead, Robert (Central Bank of Ireland) |
| Abstract: | This paper decomposes the sources of capital misallocation at the country and industry level in Europe. Using a comprehensive dataset of European firms from 19 countries, we find that the majority of the observed misallocation stems from persistent firm-specific distortions, with a smaller role for adjustment costs and uncertainty. We document substantial differences in the sources of misallocation across industries. Our analysis reveals strong correlations between these permanent distortions and industry-level variation in both financial factors, and factors relating to productivity. Understanding the factors driving capital misallocation is important for policymakers seeking to address productivity constraints and stimulate growth in the long run. |
| JEL: | E0 O11 O4 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:cbi:wpaper:11/rt/25 |
| By: | Meryem Gökten (The Vienna Institute for International Economic Studies, wiiw); Richard Grieveson (The Vienna Institute for International Economic Studies, wiiw); Oliver Reiter (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Neue Wege für die EU-Türkei-Wirtschaftsbeziehungen – Zollunion im Wandel? This publication is available in German language only. For a brief English summary see further below. Dieser Bericht analysiert die wirtschaftlichen Entwicklungen der EU-Türkei-Zollunion und deren geopolitische Implikationen. Während das Handelsvolumen seit 1996 gestiegen ist, haben die EU und Österreich als Handelspartner an relativer Bedeutung verloren, insbesondere zugunsten Russlands und Chinas. Auch innerhalb Europas zeigen sich Verschiebungen Der Handel verlagert sich zunehmend zugunsten osteuropäischer Mitgliedstaaten, während die Beziehungen zu traditionellen westeuropäischen Partnern, insbesondere den großen Volkswirtschaften, tendenziell rückläufig sind. Spanien bildet eine Ausnahme, wo sich das Handelsvolumen aufgrund enger politischer und wirtschaftlicher Beziehungen deutlich erhöhte. Zwar hat die Zollunion den Handel insgesamt deutlich gefördert, doch ihr enger Umfang sowie insbesondere bestehende nichttarifäre Handelshemmnisse schränken das Exportpotenzial für die Mehrheit der EU-Mitgliedstaaten weiterhin ein. Neue US-Zölle und der eskalierende transatlantische Handelskonflikt erschweren zusätzlich die bilateralen Handelsbeziehungen zwischen der EU und der Türkei. Gleichzeitig öffnen sie jedoch Spielräume für eine Modernisierung. Aber die Zollunion bleibt politisch umstritten Im Laufe der Jahre haben politische Differenzen, innenpolitische Turbulenzen in der Türkei sowie der daraus resultierende stagnierende EU-Beitrittsprozess das bilaterale Verhältnis zunehmend belastet. Trotz ihrer wachsenden geopolitischen Bedeutung gilt die Türkei weiterhin als instabile Partnerin Die Verhaftung des Istanbuler Bürgermeisters Ekrem İmamoğlu und die Repressionen gegen die größte Oppositionspartei CHP haben das Vertrauen europäischer Partner weiter geschwächt, mit negativen Folgen nicht nur für die politischen Beziehungen, sondern auch für das Vertrauen von Investor innen. In vier Szenarien untersuchen wir die Auswirkungen möglicher Handelsentwicklungen auf Wohlfahrt und Handelsströme, insbesondere für die EU und die Türkei. Die Ergebnisse zeigen, dass eine tiefgreifende Modernisierung der Zollunion das Handelsvolumen zwischen der Türkei und der EU deutlich erhöhen und spürbare Wohlfahrtsgewinne für die Türkei erzielen, die negativen Effekte eines Handelskonflikts mit den USA für die EU aber nur sehr gering abmildern könnte. New paths for EU-Turkey economic relations – Custom Union in transition? This report analyses economic developments since the introduction of the EU–Turkey Customs Union and examines the geopolitical implications of its modernisation. While EU–Turkey trade has grown since 1996, the EU and Austria have lost market share in Turkey’s overall trade, particularly to Russia and China. Shifts are also visible within Europe trade is increasingly tilting toward Eastern European member states, while ties with traditional Western partners, especially the large economies, are gradually weakening. Spain is an exception, with trade volume increasing significantly due to its close political and economic ties with Turkey. Although the customs union has significantly promoted trade overall, its narrow scope and, in particular, existing non-tariff trade barriers continue to limit the export potential for the majority of EU member states. New US tariffs and the escalating transatlantic trade dispute are further complicating EU-Turkey trade relations. At the same time, the EU continues to conclude new FTAs, which intensifies the asymmetry of the customs union for Turkey and reinforces the need for modernisation. Yet the customs union remains politically contentious within the EU long-standing political disagreements, domestic turbulence in Turkey, and the stalled accession process have increasingly strained bilateral relations. Despite its growing geopolitical importance and the need to modernise the customs union, Turkey continues to be seen as an unstable partner. The arrest of Istanbul Mayor Ekrem İmamoğlu and the crackdown on the main opposition party, the CHP, have further eroded the confidence of European partners, harming political relations as well as investor sentiment. In four scenarios, we assess how different modernisation options for the customs union would affect welfare and trade flows for the EU and Turkey. The results show that a comprehensive upgrade of the customs union could substantially increase EU-Turkey trade and deliver clear welfare gains for Turkey, but would only marginally cushion the EU from the negative effects of a trade conflict with the United States. |
| Keywords: | Zollunion, EU-Türkei-Beziehungen, berechenbares allgemeines Gleichgewichtsmodell |
| JEL: | F13 F14 F50 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:wii:ratpap:rpg:32 |
| By: | Francesco Zezza; Gennaro Zezza |
| Abstract: | This paper investigates the implications of the European Union's revised fiscal governance framework for Italy, a country facing the dual challenge of high public debt and persistent economic stagnation. Using a Stock-Flow Consistent (SFC) macroeconometric model of the Italian economy (MITA), we assess the medium-term macroeconomic implications of the government Medium-term Fiscal-Structural Plan, and whether it aligns with debt stabilization and economic recovery goals. We show how the government expenditure path, consistent with the new Debt Sustainability Analysis, leads instead to an increase in debt/GDP. We perform alternative fiscal policy scenarios (higher/lower spending; higher/lower direct tax rate; and a policy mix of higher spending and higher tax rate) and look at the effects on growth and debt sustainability. Results highlight the trade-offs inherent in adhering to the revised fiscal rules, particularly the tension between achieving long-term debt reduction and supporting growth. |
| Keywords: | European Fiscal Rules; Debt Sustainability; Empirical Stock-Flow Consistent Models; Italy; Fiscal Policy |
| JEL: | C54 E12 E17 E44 E62 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1082 |
| By: | Fellmann Thomas (European Commission - JRC); Tassinari Gianmaria (European Commission - JRC); Lasarte Lopez Jesus (European Commission - JRC); Rey Vicario Dolores (European Commission - JRC); Beber Caetano (European Commission - JRC); Barbosa Ana Luisa (European Commission - JRC); De Jong Beyhan (European Commission - JRC); Ferrari Emanuele (European Commission - JRC); Gocht Alexander; Isbasoiu Ancuta; Klinnert Ana (European Commission - JRC); Kremmydas Dimitrios; M'barek Robert (European Commission - JRC); Philippidis George; Rokicki Bartlomiej (European Commission - JRC); Tillie Pascal (European Commission - JRC); Weiss Franz (European Commission - JRC); Genovese Giampiero (European Commission - JRC) |
| Abstract: | "The Scenar 2040 study provides a comprehensive analysis of the potential impacts of two hypothetical scenarios related to the Common Agricultural Policy (CAP) on the EU agricultural sector and its broader environment. The baseline (reference scenario) is calibrated to the 2023 EU Agricultural Outlook, and the current national CAP Strategic Plans serve as starting point for the shifts in the policy scenarios. In the first scenario support is directed towards CAP measures enhancing productivity and competitiveness, whereas the second scenario shifts support towards more environmental and climate-focused interventions. The study also includes a counterfactual NoCAP scenario, simulating the removal of the entire CAP framework. The study aims to contribute to policy discussions on the future of the CAP by providing quantitative insights into the general implications of alternative CAP trajectories.The scenario results underscore the CAP’s essential role for the EU’s agricultural sector and its broader socio-economic and environmental interlinkages across territories. The results indicate that the removal of the CAP framework would have considerable heterogeneous economic, environmental, and social impacts across the EU. The two alternative CAP scenarios reveal contrasted outcomes aligned with their respective narratives. The results highlight the CAP’s critical role, the complexity involved in balancing competing objectives, and confirm market fundamentals as primary drivers of production, although policy can significantly modulate outcomes." |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc142503 |
| By: | Papathanasopoulos, Athanasios; Varoutas, Dimitris |
| Abstract: | This study evaluated the regulatory efficiency and performance of Over-the-Top (OTT) streaming platforms across ten European countries—France, Germany, Ireland, Netherlands, UK, Norway, Serbia, Greece, Italy, and Turkey—using a two-stage Network Data Envelopment Analysis (NDEA) framework. It also compared Europe to a global dataset that included countries from North America, South America, the Middle East & North Africa, and Asia-Pacific. The results from Stage revealed that European countries with modernized legislation, such as the UK, Germany, and France, demonstrated superior regulatory efficiency compared to those with outdated frameworks, such as Serbia. This highlighted the importance of up-to-date regulations, including net neutrality and data protection policies like GDPR, in fostering a strong regulatory environment. In Stage and the overall efficiency rankings (θoverall), the UK emerged as the top performer in Europe with a score of 0.5454, driven by its coherent regulatory framework, effective taxation policies, and robust market competition. Germany (0.5171) and Italy (0.4449) followed, benefiting from structured regulations and diverse OTT offerings. However, countries like Serbia (0.0484), Greece (0.1527), Ireland (0.1243) and the Netherlands (0.1710) lagged, reflecting inconsistencies in translating regulatory strengths into market success. Globally, Europe achieved a mean regulatory efficiency score of 0.7823, surpassing other regions in Stage 1 except North America, but its overall efficiency (θoverall = 0.3059) trailed North America (0.5631) and Asia-Pacific (0.3746). Europe's fragmented regulatory frameworks across countries and inconsistent implementation of taxation of international OTT platforms and OTT-specific policies hindered its ability to achieve unified market performance, despite its regulatory strengths. The findings underscored the need for European countries to adopt cohesive taxation frameworks for international streaming platforms, modernized OTT-specific regulations, and a more integrated regulatory approach to enhance the overall market efficiency. |
| Keywords: | OTT, OTT regulation, Network DEA, EU, Europe, Media policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itse25:331297 |
| By: | Gonzalez Vazquez Ignacio (European Commission - JRC); Fernandez Macias Enrique (European Commission - JRC); Wright Sally; Villani Davide (European Commission - JRC) |
| Abstract: | This report presents new evidence on the platformisation of work in the European Union, examining the prevalence and potential impacts of digital tools, digital monitoring and algorithmic management. The report is based on data from the new AIM-WORK survey, conducted in 2024-2025 and representative of the working age population in all 27 EU Member States. The data reveals that over 90% of EU workers use digital devices, with the use of AI tools at work, particularly AI chatbots powered by Large Language Models, rising rapidly: on average, a third of EU workers report using AI for work-related purposes. Digital monitoring is common, particularly for working hours and entry or exit. Algorithmic management is less prevalent but also quite significant, taking diverse forms, including automated task allocation and performance evaluation. We identify two distinct types of platformisation, typical respectively of industrial and office workplaces. Our evidence indicates that some types of platformisation have no significant implications for working conditions. However, the full platformisation of work, which includes simultaneously all the forms of digital monitoring and algorithmic management that we identify on the basis of the data, is associated with generally worse working conditions. This applies also to the forms of platformisation more prevalent in manual work settings. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc143072 |
| By: | Andrzej Torój; Joanna Bęza-Bojanowska; Rafał Chmura; Kareem Ismail; Dominika Kroschel; Mr. Waikei Raphael Lam; Agnieszka Szczypińska; Bartłomiej Wiśnicki |
| Abstract: | The paper investigates the properties of Poland’s Stabilizing Expenditure Rule (SER) in the context of economic governance reform in the EU. The analysis uses a granular macroeconometric model (Chmura et al., 2024) that incorporates heterogeneous fiscal multipliers across expenditure items and endogenous tax bases. This novelty supports emprically-grounded simulations to analyze the impact of adverse shocks on output, fiscal balances, and debt dynamics, including through the binding expenditure rules and potential shifts in the composition of expenditures. Our results show that the SER generally ensures lower fiscal deficits (and debt path) than policies that only target the compliance with the Stability and Growth Pact (SGP) thresholds. This is because of the inherent corrective mechanism built in the SER that requires a tightening of fiscal stance when rules are breached. The SER is shown to have counter-cyclical properties, although the extent depends also on the parameters in the correction mechanism. |
| Keywords: | Fiscal Rules; Debt Sustainability; Stabilizing Expenditure Rule; Poland; Econometric Model |
| Date: | 2025–11–14 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/238 |
| By: | Herzberg, Julika; Knetsch, Thomas A.; Popova, Dilyana; Schaller, Jannik; Schwind, Patrick; Weinand, Sebastian |
| Abstract: | We analyse potential mismeasurement of the Harmonised Index of Consumer Prices (HICP) at the upper level of aggregation, focusing on two sources of measurement error: the choice of index formula (representativity component) and the reliability of weights (data vintage component). The representativity component captures the fact that a Laspeyres-type index such as the HICP suffers from a systematic over-estimation of inflation due to the disregard of changes in more recent consumption patterns. The data vintage component comprises potential mismeasurement arising from the annual updating of HICP weights based on preliminary national accounts data. With national accounts vintage data, we calculate bias and inaccuracy metrics in order to analyse mismeasurement at the upper level of aggregation in the HICPs for Germany, France, Italy, Spain and the Netherlands, as well as for the country group, over the period from 2012 to 2021. For the representativity component, the data availability allows an additional analysis of the period until 2024. Measured in terms of annual HICP rates, the total upper-level aggregation bias falls short of one-tenth of a percentage point. The representativity and the data vintage component are both found to contribute to overall bias in quite similar shares. We also find that the representativity component experienced a substantial revival during the recent high inflation period. |
| Keywords: | Inflation measurement, Representativity bias, Updating of weights, High inflation period |
| JEL: | E31 C43 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubtps:331894 |
| By: | Martínez-sánchez Wilfrid; Mariscal De Gante Martin Alvaro (European Commission - JRC); Fernandez Macias Enrique (European Commission - JRC); Gonzalez Vazquez Ignacio (European Commission - JRC); Moilanen Fanni |
| Abstract: | The Twin Transition is a cornerstone of EU policy, driving structural changes in European labour markets. However, a critical gap exists between policy and empirical evidence due to the lack of measurement instruments. This study addresses this gap by developing and testing the Twin Transition Survey, designed to measure synergies between digitalisation and sustainability at the workplace. Our results, based on experts' review, cognitive testing and a pilot survey, yield clear insights. First, the aim of capturing synergies should not be conflated with operational measurement. Workers are likely to perceive the green and digital transitions as two distinct phenomena because of their differential tangible impacts. Therefore, survey instruments should treat them as operationally separate to reduce cognitive burden and improve response validity. Second, some indicators used in the literature, e.g., those targeting company-level practices or perceived environmental impacts, can increase nonresponse rates and are prone to acquiescence bias, especially among frontline workers, potentially leading to overestimation. Data reliability is higher when based on factual, individual-level indicators grounded in workers’ direct experience with their daily tasks. These should be complemented with more generalizable measures of “soft greening”, whose reliability can be checked by segmenting responses by supervisory role. Finally, the study presents the questionnaire of the survey as a validated tool to measure the impact of the Twin Transition at the workplace. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:laedte:202507 |
| By: | Carpentier Elodie (European Commission - JRC); Nepelski Daniel (European Commission - JRC); Torrecillas Jodar Juan (European Commission - JRC) |
| Abstract: | This report investigates the strengths and gaps in the European Digital Innovation Hubs (EDIH) Network in its first stage, with regards to advancing AI adoption within Europe. As announced in the AI Continent Action Plan, the second generation of EDIHs will become AI experience centres and need to reinforce their AI-related services and capacities. From 16 extensive interviews conducted with a diverse sample of EDIHs and complemented with EDIH-reported data on their activities, the report offers an in-depth analysis of capabilities of the first generation of EDIHs, such as identifying and addressing customers' challenges, helping customers implement AI solutions, leveraging the AI ecosystem, and raising awareness and skills for AI. In this first phase, the EDIHs demonstrate strong capacity in understanding and addressing customer challenges related to AI adoption through substantial support like awareness sessions, training programs, and mentoring. EDIHs are supporting established AI applications more commonly than cutting-edge ones, which coincides with the limited AI readiness of their customers, as successfully adopting AI requires a foundational level of digital maturity, including a solid digital business strategy, skills, processes, and infrastructure. Primary sectors of AI adoption are manufacturing, health care, and energy. EDIHs are well-connected with digital providers, AI experts, and testing facilities, but they have fewer links with regulatory bodies affecting full AI implementation support. While EDIHs are active in raising AI awareness and enhancing skills, most show shortcomings in assessing social and environmental impacts and need improvements in providing regulation and ethics guidance. To address this challenge, the Apply AI Strategy will propose how to better prepare the second generation of the Network to serve as first line help desks for regulatory compliance. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc141305 |