Gabriel Felbermayr — Future head of Austrian Institute of Economic Research

For once, the news of April 6, 2021 in Austria is not COVID-19 dominated, but concerns the appointment of a new head of the Austrian Institute of Economic Research (Wifo). This is not just a major news, but a top decision, because Gabriel Felbermayr is one of the most renowned Austrian economists with high international profile.

Gabriel Felbermayr - An internationally recognized economist from Austria

There is not a lot of positive news these days, as the news situation is largely overshadowed by COVID-19. This makes the post-Easter news from the newsrooms that Gabriel Felbermayr is to take over as head of the Austrian Institute for Economic Research in Vienna from 1 October 2021 all the more welcome. Gabriel Felbermayr was born in Steyr in 1976. He completed his doctorate in Florence after studying at Kepler University in Linz. For almost a decade, Felbermayr was head of the Ifo Center for International Economics in Munich. From March 2019, he became president of the renowned Kiel Institute for the World Economy. Parallel to the leadership functions in the economic institutes, he also held professorships for international economics or economic policy in Munich and Kiel. Anyone following his academic publications will quickly realize that Felbermayr is one of the most diligent researchers with numerous publications on current economic issues (most recently mostly in the Kiel Working Papers).

Due to his focus in academic research

  • International trade policy
  • European integration
  • International migration
  • International climate policy
  • International Development

the appointment of his person in Kiel was an ideal staffing. This made his return to Austria all the less likely. But all the greater is now the gain for Austria to win back an internationally recognized expert on globalisation, international economic development and welfare, international value chains and climate policy to head the Austrian Institute for Economic Research, and at the same time to have selected a competent and active advisor for Austrian economic policy. Since the tender also called for academic research work, Felbermayr should also receive a professorship in Vienna from which students in Austria should benefit.

Austria - an open economy needs entrepreneurial creativity

"Why can't politicians in Europe manage to allow growth [...] We always talk about promoting growth, which has to be subsidised, and then it needs billions. But letting things run, giving free space, that's where we have a hard time!" This statement by Gabriel Felbermayr from a podcast in March describes very well what the world-renowned Austrian economist stands for. A convinced market economist, a friend of entrepreneurial innovation and structural renewal, of free trade, but also of global climate policy.

He has been actively involved in European and German economic policy. "We dramatically underestimate the economic damage" was the insight in the COVID-19 discussion in Germany. "We need a central policy change [...] Businesses would have to be more involved in the pandemic fight - with incentives instead of bans/restrictions. And the government must quickly make proposals on how it will cushion the long-term consequences." This makes it clear that Felbermayr is bringing the issue of proportionality into the COVID-19 fight.

Felbermayr has also spoken out with regard to location policy: "Expert praises Yellen's minimum tax proposal for companies" reads, for example, in the news magazine Spiegel. But with an immensely important qualification that is unfortunately ignored in many commentaries: "If the international minimum taxation were to be accompanied by a swing towards the destination country principle - according to which profits are taxed where they actually arise in terms of turnover - then that would be a problem for Germany, an export surplus country." The tax base for corporate taxation would become smaller - and with it fiscal revenues. By the way, the above also applies to Austria to the same extend!

Conclusion - Tu felix Austria

With Gabriel Felbermayr, the Austrian Economic Research Institute has certainly received an optimal appointment, which was not necessarily to be expected. One can only congratulate the social partners, who unanimously voted for Felbermayr as the board of the Institute, on this election. Since an academic position was demanded at the same time, economic science in Austria also receives a prominent access and impulse.

Austria as an export-oriented country, whose prosperity will continue to depend on its competitiveness in the future, has thus received a competent voice for crucial issues in the coming years. Felbermayr has been very active in Germany in his statements on economic policy, which can only be good for domestic politics. Felbermayr advocates free-market solutions and is a proponent of globalisation and fair world trade, but also of a sensible climate policy. Austria's government has good reason to base its actions on the sound knowledge of the new head of the Austrian Institute of Economic Research. After the appointment of Martin Kocher as Minister of Labour, this is another excellent decision for Austria's economic policy.

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Peter BREZINSCHEK

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Peter Brezinschek is acting as Chief Analyst in Raiffeisen Banking Group since 1985. From 1999 to 2020 he was Global Head of Raiffeisen Research. In 1992 he founded the CEE analysis activity in Austria and locally in Central & Eastern European units. Since 2002 he has bundled all economic and financial analysis of the Raiffeisen Banking Group under the brand name “Raiffeisen Research”. He has worked as a co-author on several specialist books and regularly gives public lectures on economics and financial market topics. Active as an expert in the Austrian Fiscal Council for 20 years. The principal interests are ordo-liberalism & economic policy in the context of climate change, the business cycle development as well as monetary & fiscal policy. In his private life he likes to do all kinds of sports to enjoy nature and stay fit. Personal passion is financing tree planting in the City of Vienna.