Monthly Report No. 9/2024

Chart of the month Is Europe ready for an abrupt halt to Russian gas deliveries via Ukraine? by Artem Kochnev and Vasily Astrov Opinion Corner Economics is not doing enough to address the looming ecological disaster by Josef Pöschl It is often argued that, if individuals compete in the pursuit of maximum profit, this leads to an optimal allocation of resources. In some societies, this principle has indeed generated unprecedented economic prosperity. But up to now, most economists have preferred to ignore the uncomfortable fact that this prosperity – at least partially – relies on the exploitation of nature and is thus not sustainable. They should focus more on environmental issues, devising incentives for people and companies to behave in an environmentally responsible way across a wide range of sectors. From the Bretton Woods system to global stagnation by Leon Podkaminer After the demise of the Bretton Woods system, the world economy entered an era of deepening liberalisation at both the national and the international level. There has been a phenomenal rise in international trade. Surprisingly, this has halved the growth rate of global GDP – and has yielded many other undesirable outcomes. This article argues that this is all the result of excessive trade imbalances emerging under liberalised trade and capital flow arrangements, as well as the ‘race to the bottom’ with respect to wages. Labour taxes in the Western Balkans by Branimir Jovanović Labour tax rates in the Western Balkans are lower than in the nearby EU countries. They are also much less progressive and, in many cases, are even regressive, especially at higher income levels. This is due primarily to the cap on social contributions and the prevalence of low, largely flat personal income taxes. Such a tax structure raises concerns about tax justice and fairness, but it also deprives governments of crucial revenue that could be used for public goods and services. To address this issue, Western Balkan governments could introduce more progressive personal income tax systems and/or raise or eliminate the cap on social contributions. Monthly and quarterly statistics for Central, East and Southeast Europe