Economy
European Solar Test Installation (ESTI) JRC Ispra site (Italy)
In a rapidly evolving global economy, the EU is facing significant challenges while seeking to maintain economic stability and fuel economic growth. As the European Commission’s science and knowledge service, the JRC plays a vital role in supporting the EU’s economic agenda.
Through cutting-edge research and tools, the JRC clarifies the implications of ongoing global trends and navigates current complex economic challenges. We develop a wide range of tools for monitoring GDP, inflation and other macroeconomic trends. JRC models are also used for fiscal surveillance, forecasting and nowcasting. Through real-time data, including big data, we zoom into real-time, real world economic activity.
CORTAX is a Computable General Equilibrium (CGE) model designed to evaluate the macroeconomic effects of corporate tax reforms. By simulating different corporate tax policy scenarios, CORTAX enables the JRC to assess the impact of corporate taxation reforms on growth, investment, and profit shifting across borders. The insights from this model support key EU initiatives like the Head Office Tax System for SMEs (HOT), the Business in Europe: Framework for Income Taxation (BEFIT) and reforms aimed at reducing the debt-equity bias in corporate taxation.
Both tools offer invaluable insights into how fiscal policies affect competitiveness and growth, helping the EU remain agile in an increasingly complex global economy.
The JRC offers a range of tools to help policymakers and researchers better understand and respond to economic challenges. One such tool is the newly enhanced version of EUROMOD, a powerful tax-benefit microsimulation model that helps assess the effects of tax-benefit policies on income distribution and poverty.
The 2024 release of EUROMOD introduces new functionalities, including the simulation of consumption taxes (VAT and excises) across all Member States. It enables governments to evaluate the impact of taxation and benefit policies, ensuring that interventions are fair and effective in reducing inequality and boosting economic stability.
EUROMOD has been widely used to assess tax-benefit reforms in Member States, and to provide analytical input for country-specific recommendations in the context of The European Semester for economic policy coordination.
The JRC Housing Taxation Database provides for all 27 Member States, a time series (1995- 2022) of data related to housing taxation (incl. transfer taxes, capital gain taxes, imputed rent taxation, recurrent property taxes, as well as housing financing conditions and its tax treatment). The data are used to estimate the User Cost of Owner-Occupied Housing (UCOH), which measures distortions exerted by the tax system on households’ housing investment choices.
The JRC contributes to the EU’s economic competitiveness through its research on occupational change. By monitoring shifts in job structures across different sectors and regions, the JRC identifies whether economies are moving towards higher-paid, higher-quality jobs or experiencing a more polarised labour market. This research reflects how global trends—such as technological advancements and demographic shifts—are affecting the EU’s labour markets, providing crucial insights for economic planning.
A collaboration between the JRC and the Hellenic Ministry of Labour and Social Affairs demonstrates the benefits of leveraging research to develop stronger social policy frameworks. The partnership customises, adapts and updates the EUROMOD model, extending its functionalities to harness administrative data, enabling more accurate simulations of the fiscal and social impacts of employment, social insurance, and welfare policies. This timely approach supports evidence-based decisions by continuously updating tools that reflect real-world conditions. It also provides an adaptable model that could serve other countries aiming to enhance the effectiveness of their social policies.
The JRC Summer School on Sustainable Finance brings together academics, policymakers, and industry professionals to explore the latest trends in sustainable finance. The summer school highlights emerging challenges such as climate-related financial risks and the potential of digital technologies in promoting a green economy. The JRC facilitates collaboration among experts, to shape a sustainable financial future for Europe. The initiative highlights how knowledge-sharing and collaboration across borders can spur innovation, strengthen economies, and boost competitiveness.
The JRC also conducts valuable in-depth research on digital finance to better understand the challenges and opportunities for the financial sector posed by the digital transition. Specifically, it is working to monitor financial flows of crypto assets and understand the dynamic of specific assets such as stablecoins. The JRC supported EU policy development such as the EU Digital Finance Platform and its research helps guide regulatory frameworks, ensuring that digital finance innovations, like the digital euro, are secure, inclusive, and efficient while maintaining financial stability.
