https://hdl.handle.net/10419/219461 2026-10-23T10:56:50Z 2026-10-23T10:56:50Z Baur, Andreas Flach, Lisandra Moriana-Armendariz, Xabier https://hdl.handle.net/10419/341349 2026-06-10T10:49:26Z 2026-01-01T00:00:00Z

Title: Global Europe 2.0: The economic potential of new EU Trade Agreements in an era of US protectionism Authors: Baur, Andreas; Flach, Lisandra; Moriana-Armendariz, Xabier Abstract: The protectionist trade policy of the second Trump administration poses a significant challenge to the European economy, hitting export-oriented manufacturing particularly hard. Against this backdrop, this study quantifies the economic potential of a new European free trade initiative ("Global Europe 2.0") centered on new trade agreements with seven key trading partners: the Mercosur countries, India, the United Arab Emirates, Australia, Indonesia, Malaysia, and Thailand (the P7). Despite accounting for 13 percent of global merchandise imports, the P7's share in EU exports has stagnated over recent decades, pointing to untapped potential that new agreements could help unlock. Using the ifo Trade Model, a quantitative general equilibrium model, we simulate two scenarios: a baseline capturing the medium-term effects of current US tariff policy, and a scenario adding new EU-P7 trade agreements. We find that P7 agreements would more than offset the adverse effects of US protectionism, generating a net positive effect on EU economic activity. Depending on agreement depth, EU real GDP rises by 0.18 to 0.43 percent and total exports by 1.3 to 3.4 percent. Gains are broad-based across all 27 member states, and the turnaround is most striking for EU manufacturing.

2026-01-01T00:00:00Z Borghesi, Simone Cammeo, Jacopo https://hdl.handle.net/10419/325307 2025-09-12T02:14:12Z 2025-01-01T00:00:00Z

Title: The macroeconomic impact of different decarbonization paths and strategies Authors: Borghesi, Simone; Cammeo, Jacopo Abstract: The severe upheavals caused by anthropogenic climate change have led to an increasing global effort to mitigate the negative effects of global warming. In this, the European Union has taken the lead in pioneering initiatives to achieve carbon neutrality as a continent by 2050. The climate policies put in place follow a deep decarbonization approach, aiming at a quick response to the climate crisis through the pursuit of stringent goals. These numerous and ambitious policies have led to some encouraging results, but they look challenging for their potential impact on the socio-economic system. The existing literature and the work of relevant research centers on environmental economics find that the paradigm shift should not lead to significant effects on macroeconomic variables such as GDP, inflation, employment, investment, and industrial production. However, it is clear that the qualitative transformation required to move from a fossil fuel-based society to a net-zero carbon one is not painless. At least in the short term, stringent climate policies may take on the contours of a real shock, with potentially unfavorable and, above all, unfair macroeconomic repercussions. If not properly guided, the phasing out of fossil fuels and the extension of carbon markets to new sectors not previously covered by the mechanism might impact the most vulnerable segments of the population, squeezing economic development, negatively affecting employment, and undermining consumption. To avoid the adverse effects of decarbonization, Europe has several mechanisms at its disposal, such as the Just Transition Mechanism, the redistribution of EU ETS2 revenues to the Social Climate Fund, and plans for clean industrial production and green technologies. However, further efforts will be needed to mitigate the impact of the net-zero strategy on citizens' purchasing power, avoid stranded assets, sustain green conversion efforts of the industrial system, and support the development of new technologies such as carbon capture, utilization, and storage. The new European Commission will have to deal with a complex macroeconomic situation already geared toward stringent but fair climate policies. The hope is to meet the planned timetable without compromising the socio-economic system, respecting the motto "leave no one behind" and at the same time coming close to the stringent goals of the Paris Agreement.

2025-01-01T00:00:00Z Hillrichs, Dorothee Wölfl, Anita https://hdl.handle.net/10419/325306 2025-09-12T02:14:09Z 2025-01-01T00:00:00Z

Title: Complexities and dependencies in the global semiconductor value chain Authors: Hillrichs, Dorothee; Wölfl, Anita Abstract: This EconPol Report sheds light on the global supply of semiconductors. Our analysis of value-added data for the US underscores the importance of semiconductors for advanced economies. Using global trade data and an extensive list of semiconductor-related goods, we provide a detailed description of the global semiconductor economy. We show that while final chip exports have been dominated by Taiwan, China, and Korea at an aggregate level since the early 2010s, export leadership varies substantially across chip types. Moreover, we identify nine core countries in North America, Europe, and Asia that dominate semiconductor-related trade including material inputs and equipment. The nine countries exhibit substantial mutual trade dependencies due to the fragmentation of semiconductor production. Against the backdrop of a rise in policy interventions affecting semiconductors since 2021, we end this report by flagging open questions about the economics of semiconductor production.

2025-01-01T00:00:00Z Richter, Philipp M. Wanner, Joschka https://hdl.handle.net/10419/325305 2025-09-12T02:14:18Z 2025-01-01T00:00:00Z

Title: EU climate policy in a globalized world Authors: Richter, Philipp M.; Wanner, Joschka Abstract: In this EconPol Policy Report, we assess various options for EU climate policy utilizing a quantitative trade and environment model. We investigate the EU's 2030 emission reduction target, evaluate the impact of the newly introduced Carbon Border Adjustment Mechanism (CBAM), and analyze different climate coalitions with the EU at their core, including the recently launched "G7-led Climate Club." We thereby assess the impact on both national and global emissions accounting for carbon leakage, on international economic competitiveness and changes in the global market shares of the EU, as well as on aggregate income gains and losses. Our findings indicate that EU climate policies do not impose substantial costs, have a limited impact on global emissions, but generate substantial gains from avoided climate damages. The only modest global emission reduction is primarily due to the EU's relatively small share in global emissions and carbon leakage in response to its climate policy. Our analysis demonstrates that the CBAM reduces, but does not entirely eliminate, carbon leakage and helps prevent income losses for the EU. In contrast to the low average costs for the EU across all scenarios, we show that the costs of climate policy are disproportionately borne by resource-rich countries. Achieving significant global emission reductions will require a climate coalition. However, our findings suggest that relying solely on a "G7-led Climate Club" is insufficient for the necessary global emission reductions. This underscores the need to foster a comprehensive global coalition.

2025-01-01T00:00:00Z