Monthly Report No. 4/2025

Alexandre Bernier, Doris Hanzl-Weiß, Philipp Heimberger, Michal Hrubý, Ambre Maucorps and Leon Podkaminer

No 2025-04, wiiw Monthly Reports from The Vienna Institute for International Economic Studies, wiiw

Abstract: Chart of the month Germany’s historic fiscal policy shift by Philipp Heimberger Opinion Corner Does inflation retard growth? Not necessarily! by Leon Podkaminer Inflation is commonly believed to lead to various misfortunes – above all, the misallocation of productive resources. However, seemingly over the longer run it correlates positively with per capita GDP growth it appears that the higher the inflation, the faster the economic growth. Against this background, one of the sources of weakness in the euro area economy may have been the overactive fight against inflation, rather than inflation itself. EU enlargement and climate neutrality taking up the twofold challenge of economic and environmental convergence by Ambre Maucorps and Alexandre Bernier The EU’s goal of achieving climate neutrality by 2050 has recently been embraced by EU candidate countries, demonstrating their commitment to reducing polluting emissions. Although their recent progress on the carbon intensity of their economies has been promising, their heavy dependence on fossil fuels and the limited fiscal room they have cast doubt on their capacity to meet EU environmental performance standards. Without substantial support from the EU even before accession, it is unlikely that candidate countries will manage to decarbonise their economies sufficiently by 2050 to be on a par with the rest of the EU. The state of the Czech automotive industry and the outlook for it by Doris Hanzl-Weiss and Michal Hrubý This article considers the state of the Czech automotive industry and the outlook for it, and sheds light on two aspects of it – cars and battery production and exports – making various comparisons with Slovakia. It highlights Czechia’s relatively robust production portfolio, with its increasing share of electric vehicles, its reliance on geographically close export markets with low geopolitical risk, and its ongoing integration into battery supply chains (albeit with a heavy reliance on imported battery cells). While the overall outlook for the automotive industry may appear gloomy, Czechia could hardly have entered this period in a better position. Monthly and quarterly statistics for Central, East and Southeast Europe

Keywords: fiscal policy; debt brake; inflation; economic growth; climate neutrality; GHG emissions; fossil fuels dependence; automotive industry; electric vehicles; batteries (search for similar items in EconPapers)
Pages: 56 pages including 2 Tables 36 Figures and 2 Boxes
Date: 2025-04
New Economics Papers: this item is included in nep-env
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