https://hdl.handle.net/10419/219462 Thu, 12 Nov 2026 21:24:03 GMT 2026-11-12T21:24:03Z https://hdl.handle.net/10419/338921 Title: The effectiveness of EU export bans on military goods Authors: Scheckenhofer, Lisa; Teti, Feodora; Torun, David; Wanner, Joschka Abstract: In response to Russia's full-scale invasion of Ukraine in February 2022, the European Union (EU) and its allies imposed broad export bans against Russia. Besides exerting economic pressure on the aggressor, a central objective was to cut Russia off from critical technologies needed to produce and maintain military equipment. However, enforcement has proven challenging. Recovered weapons on the battlefield repeatedly contain Western inputs that should have been restricted, raising concerns about the effectiveness of export controls in limiting Russiaʼs military capabilities. This persistence reflects widespread sanctions evasion and the gradual tightening of export controls. Throughout much of 2022 and 2023, many military-relevant products were only partially restricted, allowing exports to continue legally. We use novel, highly granular data to document the gradual tightening of EU export controls on military-relevant goods. Only in January 2024 were all product categories fully sanctioned. Until then, restrictions remained limited in scope, despite being described as an export ban. We then quantify how and to what extent EU-origin military goods continued to reach Russia after the invasion. Sizable flows persisted for nearly two years, first through legally permitted direct exports and later through indirect exports, with goods rerouted via third countries, until tighter enforcement and secondary sanctions substantially curtailed both channels.1 Around one third of indirect exports passed through Türkiye, with much of the remainder routed via China, Hong Kong, and the United Arab Emirates. Overall, we estimate that the export ban raised effective trade costs for EU military goods shipped to Russia by only 19 percent, well below the levels typically implied by an export ban, which would correspond to an infinitely high increase. These patterns point to two broader lessons. First, sanctions were not tight enough from the outset, likely reflecting concerns about protecting European producers. Second, while enforcement eventually shut down all direct exports, curbing the remaining flows will require greater pressure on key hubs for indirect exports, potentially using secondary sanctions. Indeed, stricter enforcement from the beginning of 2024, which also targeted intermediary countries, led to a significant decline in indirect exports. Thu, 01 Jan 2026 00:00:00 GMT https://hdl.handle.net/10419/338921 2026-01-01T00:00:00Z https://hdl.handle.net/10419/338923 Title: Fiscal drag in Europe: Key facts Authors: Dolls, Mathias; García-Miralles, Esteban; Lay, Max; Peichl, Andreas Abstract: High and persistent inflation, observed in Europe in the wake of the COVID-19 pandemic and the energy crisis triggered by Russiaʼs war of aggression against Ukraine, can substantially shift tax burdens through fiscal drag - the tendency for rising nominal incomes to push taxpayers into higher brackets or reduce the real value of credits and deductions when these parameters are not fully indexed to inflation. Because most European personal income tax systems are progressive and defined in nominal terms, even unchanged real earnings can lead to higher effective tax rates, increasing revenues while eroding householdsʼ purchasing power and altering income distribution. In a recent paper (García-Miralles et al. 2026), we present a comprehensive assessment of fiscal drag across Europe, covering 21 countries, including all euro area members and Hungary. Using harmonized household survey data in combination with EUROMOD (Sutherland and Figari 2013), the tax-benefit microsimulation model for the EU, we provide new evidence on both the built-in scope for fiscal drag within personal income tax systems and the extent to which this phenomenon actually emerged between 2019 and 2023. This policy brief summarizes the key findings. Thu, 01 Jan 2026 00:00:00 GMT https://hdl.handle.net/10419/338923 2026-01-01T00:00:00Z https://hdl.handle.net/10419/338922 Title: The role of the Strait of Hormuz for Germany and the EU Authors: Bodenschatz, Philip; Flach, Lisandra Abstract: This policy brief examines the economic importance of Iran and neighboring countries relying on the Strait of Hormuz for trade flows of the EU and Germany. It then assesses the potential impact of a blockade of the Strait of Hormuz, which would significantly disrupt trade in the region. Thu, 01 Jan 2026 00:00:00 GMT https://hdl.handle.net/10419/338922 2026-01-01T00:00:00Z https://hdl.handle.net/10419/341356 Title: Robots and non-participation: Evidence and lessons from the US and Europe Authors: Di Giacomo, Giuseppe; Lerch, Benjamin Abstract: The rapid diffusion of industrial robots since the early 1990s has profoundly reshaped labor markets. While automation has generated new job opportunities, it has also displaced a large number of workers and contributed to the long-run decrease in male labor force participation in the United States. In a recent study (Di Giacomo and Lerch 2026), we provide new evidence on how workers exposed to robot adoption adjust their labor force participation decisions and on the pathways of displaced workers after they exit the labor market. In particular, we show that between 1993 and 2014, each additional industrial robot is associated with four workers in the US leaving the labor force. Most displaced workers either retire early or enter disability insurance, while younger workers tend to enroll in college. In Europe, the adverse labor market effects of automation are less pronounced, since employment growth in other occupations and industries partly offsets these losses. However, displaced workers may still exit the labor force due to skills mismatches with newly created jobs. Our findings provide important insights into the labor market consequences of automation and can help inform policies aimed at supporting workers and strengthening labor market resilience in the face of ongoing technological progress. Thu, 01 Jan 2026 00:00:00 GMT https://hdl.handle.net/10419/341356 2026-01-01T00:00:00Z