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The Impact of the U.S. Inflation Reduction Act (IRA) on the German Economy

Author

Listed:
  • Andreas Baur
  • Clemens Fuest
  • David Gstrein
  • Philipp Heil
  • Niklas Potrafke
  • Aurel Rochell

Abstract

The impact of the IRA on the U.S. domestic economy is controversial. Empirical studies on the impact of the IRA on trading partners, especially Germany, are not available. Descriptive statistics show that the United States is an important market for German products, especially in the automotive, machinery, and pharmaceutical industries. Possible counter-reactions by the German government or the European Union should be viewed with caution in light of the threat of a subsidy race with negative consequences for all parties involved.

Suggested Citation

  • Andreas Baur & Clemens Fuest & David Gstrein & Philipp Heil & Niklas Potrafke & Aurel Rochell, 2023. "The Impact of the U.S. Inflation Reduction Act (IRA) on the German Economy," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 137.
    • Handle: RePEc:ces:ifofob:137
    as

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    File URL: https://www.ifo.de/DocDL/ifo_Forschungsbericht_137_reduction_act.pdf
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    References listed on IDEAS

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    Cited by:

    1. Klaus Gründler & Philipp Heil & Niklas Potrafke & Timo Wochner, 2023. "The US-Inflation Reduction Act: Global Assessments of Economic Experts," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 138.

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