The zero interest rate policy of the European Central Bank is placing a huge burden on company pension schemes. As a result, companies are being forced to increase provisions for their direct pension obligations to their workforce. However, far from taking appropriate account of this additional expense, the state is taxing fictitious profits resulting in a tax burden of some 20 to 25 billion euros. This is depriving companies of liquidity which could otherwise be invested. A lowering of the imputed interest rate for tax purposes would counteract this effect.
Markus Demary / Michael Hüther IW-Report No. 12 8. April 2021
Global Inflation: Low for Long or Higher for Longer?
Inflation has started to increase, and the return of inflation comes at a time in which economies begin to recover from pandemic-induced and lockdown-induced recessions. This raises questions about how much and how long inflation will go up as well as about ...
Markus Demary / Michael Hüther IW-Kurzbericht No. 122 9. December 2020
ECB Strategy Review - The New Pillars: Communication and Climate Change
The European Central Bank (ECB) is reviewing its strategy. Key pillars are its communication and how monetary policy should address climate change. We advise the ECB to strengthen its communication especially with social groups unfamiliar with monetary policy. ...
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