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Philipp Heimberger Profile picture
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10 Feb, 3 tweets, 1 min read
I've often heard the claim: Italians are wealthier than Germans or Austrians; they should pay for their investments!

But Italians are not wealthier than Germans or Austrians: the median Italian household holds more net wealth, but the average household is less wealthy. #CAIN
In Germany and Austria, wealth is more heavily concentrated in richer households than in Italy. Private-property ownership plays a greater role in Italy. The public safety net, however, is less generous; social and co-operative housing is rare. /2
Social housing and co-operatives do not however count as private assets, even if people there live occasionally more comfortably than in Italian condominiums of poor standard. But it remains wrong to say that Italians are wealthier than Germans or Austrians. /end

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More from @heimbergecon

Philipp Heimberger Profile picture
11 Feb
Campaign Against Italy Nonsense:

I receive comments such as: Ok, I get your data, but what can we do to make this work? A thread with ideas on achieving North-South convergence and making the €zone work for all countries /1

socialeurope.eu/keeping-the-pr…

#CAIN Image
In its current architecture, the eurozone is a web of glass—superficially stable, but brittle when subject to shocks. To avoid a break-up and render it resilient for the long term, the sources of this fragility must be identified and remedied. /2
The reasons for the €Z’s fragility are essentially political; technical solutions have been on the table for years. There is a lack of intergovernmental trust, especially in the North, and a lack of legitimacy in the eyes of the population, especially in the South. /3 Image
Read 21 tweets
Philipp Heimberger Profile picture
8 Feb
I receive pushback by mainstream voices in Italy: "Don't say that 🇮🇹 pushed for large fiscal consolidation already! Don't say that there were labour market deregulation measures, which have not worked magic. It's too radical!"

I think moderates should wake up. Thread /1

#CAIN
The monopoly for criticising economic policy should not be in the hands of radical voices. I think one of the reasons why we are where we are is that the "mainstream" has for too long remained silent and fallen in line with the fiscal consolidation/structural reforms mantra. /2
I think we should be honest and say: running large primary surpluses over 30 years has had serious economic and political side effects. We should not just say: let's double down and push even more after the COVID19 crisis. It will not work. /3
Read 5 tweets
Philipp Heimberger Profile picture
7 Feb
Campaign Against Italy Nonsense #CAIN

This thread presents data that strongly reject claims that 🇮🇹's problem has been a lack of fiscal discipline.

Italy is the pre-Corona world champion of fiscal consolidation - with problems for investment, growth and debt sustainability /1
Many claim that Italy just didn't do enough fiscal consolidation to fix its public finances. In fact, fiscal consolidation in Italy was far more sizeable than in any other advanced country (from early 1990s up to financial crisis) - according to IMF data. /2
Due to Covid, Italy’s public debt has jumped to ~160% of GDP. It’s important to understand why Italy's public debt was high already before Corona: primarily because of the legacy of the 1980s and 1990s, when interest rates on government bonds skyrocketed. /3
Read 9 tweets
Philipp Heimberger Profile picture
6 Feb
I am today launching a small twitter initiative, the Campaign Against Nonsense about Italy (#CANI). I’ll be tweeting data and arguments for countering myths about Italy’s state and economy. In this thread, I’ll explain why I think this is necessary /1
The way journalists, politicians and economists write and talk about Italy and Southern Europe is often distorted – especially in the “frugal” public sphere. Italy is not the basket case of the popular narrative. The way we speak about stuff matters a lot for policy debates. /2
This was apparent in earlier stages of the COVID crisis, when “frugal” leaders used distorted pictures of Southern Europe to size down the grants in the EU recovery fund. If only Italy were willing to reform along "frugal" lines, things would be splendid! /3
Read 12 tweets
Philipp Heimberger Profile picture
18 Jan
My meta-analysis on corporate tax competition is out in European Journal of Political Economy. The results point to tax competition as a major factor in explaining reductions in corporate tax rates. Data and specification choices affect results: Thread /1

sciencedirect.com/science/articl…
Statutory corporate income tax rates have declined substantially in EU countries over the past decades. However, it's not straightforward to what extent these observed declines in corporate tax rates are explained by tax competition; it could also be due to other factors. /2
The literature doesn't provide general conclusions on magnitude of corporate tax competition: while several papers report clear empirical support for corporate tax competition, other papers either find no clear support or at least present mixed evidence. Meta-analysis can help /3
Read 8 tweets
Philipp Heimberger Profile picture
10 Jan
It’s totally wrong to draw the lesson from history that you have to push for “drastic anti-inflation“ policy to counteract a rise of the Nazis. Nazi rise in Germany in early 1930s happened when there was DEFLATION, worsened by fiscal austerity. Thread /1

In 1928, the Nazis had 2.6% of the votes in Germany; in 1932, they had 37.4%. Most people – across the political spectrum – don’t know that Nazi rise happened in an environment of mass unemployment and DEFLATION. /2

hertie-school.org/fileadmin/user…
Hyperinflation in Germany stopped in 1923 after the currency reform. And the real problem as the Nazis gained strength was the severe recession with deflationary pressures. Brüning’s emergency decrees introduced tax hikes and spending cuts, with devastating economic effects. /3
Read 6 tweets

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