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Smaller economic stimulus payments could boost consumer spending more

World Economic Magazine April 29, 2021

What is the consumption response to unexpected transitory income gains of different size and what are the aggregate demand implications of stimulus packages that target different segments of the population? This column explores these questions using responses to hypothetical questions in the Italian Survey of Household Income and Wealth. Families with low cash-at-hand display a higher marginal propensity to consume out of small gains, while affluent households exhibit a higher marginal propensity to consume out of large gains. For a given level of public spending, a fiscal transfer of a smaller size paid to a larger group of low-income households stimulates aggregate consumption more than a larger transfer paid to a smaller group.

Confronting the risks: corporate debt in the wake of the pandemic

World Economic Magazine April 28, 2021

As European economies emerge from lockdowns, it is becoming clearer that corporate debt has reached critical levels. A new French scheme, in which the state guarantees portfolios of subordinated debt, shows how financial support could be targeted better.

German prosecutors charge more VW managers in emissions scandal

World Economic Magazine April 24, 2021

German prosecutors have charged 15 executives from Volkswagen AG (VOWG_p.DE) and a car supplier in connection with the diesel emissions scandal that emerged in 2015, a spokesman for the prosecutor’s office said on Saturday.

Smaller economic stimulus payments could boost consumer spending more

World Economic Magazine April 29, 2021

What is the consumption response to unexpected transitory income gains of different size and what are the aggregate demand implications of stimulus packages that target different segments of the population? This column explores these questions using responses to hypothetical questions in the Italian Survey of Household Income and Wealth. Families with low cash-at-hand display a higher marginal propensity to consume out of small gains, while affluent households exhibit a higher marginal propensity to consume out of large gains. For a given level of public spending, a fiscal transfer of a smaller size paid to a larger group of low-income households stimulates aggregate consumption more than a larger transfer paid to a smaller group.

Confronting the risks: corporate debt in the wake of the pandemic

World Economic Magazine April 28, 2021

As European economies emerge from lockdowns, it is becoming clearer that corporate debt has reached critical levels. A new French scheme, in which the state guarantees portfolios of subordinated debt, shows how financial support could be targeted better.

German prosecutors charge more VW managers in emissions scandal

World Economic Magazine April 24, 2021

German prosecutors have charged 15 executives from Volkswagen AG (VOWG_p.DE) and a car supplier in connection with the diesel emissions scandal that emerged in 2015, a spokesman for the prosecutor’s office said on Saturday.

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