The size of the government has a causal and positive effect on economic growth. In the new FiFo Discussion Paper 24-1, FiFo Policy Fellow Carsten Colombier uses a panel data set from 1880 to 2016 for 17 industrialised countries to show that the real world and growth theory do not always align. However, the positive growth effect is small and does not apply to any given kind of government spending. Obviously, it remains important to strengthen the efficiency and quality of public finances.

⁠Meeting the global Sustainble Development Goals seems increasingly out of reach. Their funding is too scarce and unreliable. How could additional financing sources - especially taxes - ensure those needs are fulfilled? What criteria should be taken into account? In a ‘Deep Dive’ at the Global Solutions Summit 2024 at ESMT Berlin, Michael Thöne discusses the prospects of the emerging concept with Quentin Parrinello, José Siaba Serrate and Christian Kastrop.

No matter what the future debt brake may look like, public budgets must be consolidated qualitatively in order to maintain fiscal sustainability and the power to govern. This also means cutting out old habits. ‘That means action. We don't have a knowledge problem,’ states Michael Thöne in the Handelsblatt cover story on the reduction of subsidies and tax breaks. If everyone has to swallow bitter pills, it becomes politically easier and 20 billion euros or more can be generated each year. Tagesspiegel, Focus, The Pioneer and Welt (paywalls in some cases) also report on this.

Demographic change, digitalisation and the climate neutrality goal are putting Germany's economy through a great transformation. Maintaining and strengthening our model of value creation is crucial - but not easy in times of increasing labour shortages. In the Böll Foundation's Economic Atlas, Michael Thöne writes that immigration, AI and smart, not reality-shy policy-making can be part of the solution. Listen to the podcast here.

The KDZ Centre for Public Administration Research has appointed Michael Thöne to its Advisory Board. The KDZ in Vienna is an institute that is as rich in tradition as it is forward-thinking, bringing together research and practice for excellent scientific policy advice. "I am very much looking forward to the deepened exchange with the KDZ and the other trustees from Austria, Switzerland, Germany and South Tyrol," says the FiFo Director, expressing his gratitude for the honour.

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