Reports

Stimulus packages adopted following the COVID-19 pandemic – such as the US Inflation Reduction Act and NextGenerationEU - have been presented as an opportunity to 'build back better' and accelerate the transition to a low-carbon economy while re-igniting the economy. But this revival of industrial policy has also raised concerns about the potential for a global green subsidy war. OECD analysed funding measures worth USD 1.3 trillion announced around the world in 2020-21 to support development and diffusion of low-carbon technologies. These measures can trigger substantial greenhouse gas emissions reductions while boosting the growth of the clean tech sector in all regions and reducing dependence over fossil fuel imports. This policy brief summarises key findings from our analysis and offers additional recommendations to policymakers.

This paper provides an overview of agro-food value chains in the EU Outermost Regions (EU ORs). It assesses emerging trends, discusses opportunities and challenges, reviews the policy frameworks and tools that can strengthen the beneficial participation of EU ORs in international agro-food value chains, and proposes priority actions. The paper is developed within the framework of the EU-OECD project on Global Outermost Regions.

This report presents developments of the work of the Inclusive Forum on Carbon Mitigation Approaches (IFCMA) since its official launch in February 2023.

Located in the Caribbean Sea, Guadeloupe is a French Overseas Department and a European Outermost Region in search of a more sustainable economic development pathway. In support of that endeavour, this Production Transformation Policy Review (PTPR) Spotlight looks at the region's opportunities and challenges, identifying priority actions in several areas, including the bio- and circular economy, creative sectors and renewable energies. The Spotlight enriches our understanding of the diversity of development pathways, including those of Small Island Developing States (SIDS). It is the result of an extensive peer-review process involving public and private stakeholders from Colombia, Caribbean countries and other EU outermost regions.

Peru's solid macroeconomic framework has driven substantial economic growth and poverty reduction in the past two decades. While the economy swiftly rebounded from the pandemic due to strong policy support, it exposed structural weaknesses such as a large informal sector and stark regional disparities in accessing public services. More recently, growth has slowed, and inflation remains high but declining. Looking ahead, main challenges for boosting productivity and investment include strengthening competition, improving regulations, diversifying exports, and enhancing infrastructure. Improvements in governance and the rule of law are essential pillars for achieving sustainable long-term growth and social cohesion. Expanding access to quality education, reducing social contributions, particularly for low-income workers, and providing a same basic level of universal social protection for all workers, formal and informal alike, would help reducing widespread informality and inequities. This will require raising additional tax revenues and improving spending efficiency. Environmental challenges and risks loom large, but also provide significant opportunities for the future. To tackle environmental challenges Peru needs to curb deforestation, while capitalizing on its renewable energy potential to reduce reliance on fossil fuels. SPECIAL FEATURES: RAISING PRODUCTIVITY, EXPANDING SOCIAL PROTECTION, REDUCING LABOUR INFORMALITY

Croatia has navigated well the COVID-19 crisis and the price shocks following Russia’s war of aggression on Ukraine. It has achieved robust output growth, rising employment and improving well-being, although inflation has surged. Integration into the euro- and Schengen areas at the start of 2023 are testament to progress, and are providing a further fillip to the economy. Ensuring that fiscal policy is counter-cyclical and that lending supports productive investments can help contain inflationary pressures and sustain growth. Croatia’s ongoing and ambitious reforms and investments must continue for incomes to converge with OECD levels while also preparing for climate change. Reducing regulatory burdens, more responsive judicial processes, addressing corruption risks and improving the performance of state-owned enterprises can foster a more dynamic business environment with stronger growth by higher productivity firms. A big push to strengthen adults’ skills would ensure that employers can fill high-skilled positions and support rising incomes. Better engaging younger adults in work, encouraging older adults to work until the full retirement age, and attracting needed skills through immigration would reduce poverty risks, raise productivity and help Croatia adapt to an ageing population. SPECIAL FEATURES: IMPROVING THE BUSINESS ENVIRONMENT; A BETTER PERFORMING LABOUR MARKET

The European recovery has been disrupted since the onset of Russia’s war of aggression against Ukraine. Co-ordinated and timely policy action helped avoid a severe downturn, but the near-term outlook is clouded by uncertainty and downside risks. Monetary and fiscal policy need to become sufficiently restrictive to reduce underlying inflationary pressures durably. Fiscal sustainability should be grounded in well-prioritised, efficient public spending and underpinned by improved economic governance. Protecting the level playing field through a strong state aid framework and deepening the Single Market would open opportunities for firms to grow and innovate, facilitating needed structural change. Furthermore, achieving the net-zero target by 2050 requires an acceleration of emission reductions. More action is needed across all sectors, but particularly in sectors not covered by emission trading, notably agriculture, building and transport. Reducing emissions in these sectors will rely on regulatory measures and a gradual alignment and raising of carbon prices. An important element of the green transition is affordable and secure energy, which requires more integrated electricity markets. Deeper capital markets could support the development of new clean technologies. Moreover, improving labour mobility and skills will help to reduce transition costs. SPECIAL FEATURE: ACCELERATING THE GREEN TRANSITION

This paper estimates the data intensity of occupations/sectors (i.e. the share of job postings per occupation/sector related to the production of data) using natural language processing (NLP) on job advertisements in the United Kingdom, Canada and the United States. Online job advertisement data collected by Lightcast provide timely and disaggregated insights into labour demand and skill requirements of different professions. The paper makes three major contributions. First, indicators created from the Lightcast data add to the understanding of digital skills in the labour market. Second, the results may advance the measurement of data assets in national account statistics. Third, the NLP methodology can handle up to 66 languages and can be adapted to measure concepts beyond digital skills. Results provide a ranking of data intensity across occupations, with data analytics activities contributing most to aggregate data intensity shares in all three countries. At the sectoral level, the emerging picture is more heterogeneous across countries. Differences in labour demand primarily explain those variations, with low data-intensive professions contributing most to aggregate data intensity in the United Kingdom. Estimates of investment in data, using a sum of costs approach and sectoral intensity shares, point to lower levels in the United Kingdom and Canada than in the United States.

This is the eighth edition of Tax Policy Reforms: OECD and Selected Partner Economies, an annual publication that provides comparative information on tax reforms across countries and tracks tax policy developments over time. The report covers the tax policy reforms introduced or announced in 2022 in 75 member jurisdictions of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, including all OECD countries. The publication provides an overview of the macroeconomic environment and tax revenue context in which these tax reforms were made, highlighting how governments used tax policy to respond to elevated inflation levels, as well as to address long-run structural challenges.

Trade in value added (TiVA) indicators are increasingly used to monitor countries’ integration into global supply chains. However, they are published with a significant lag - often two or three years - which reduces their relevance for monitoring recent economic developments. This paper aims to provide more timely insights into the international fragmentation of production by exploring new ways of nowcasting five TiVA indicators for the years 2021 and 2022 covering a panel of 41 economies at the economy-wide level and for 24 industry sectors. The analysis relies on a range of models, including Gradient boosted trees (GBM), and other machine-learning techniques, in a panel setting, uses a wide range of explanatory variables capturing domestic business cycles and global economic developments and corrects for publication lags to produce nowcasts in quasi-real time conditions. Resulting nowcasting algorithms significantly improve compared to the benchmark model and exhibit relatively low prediction errors at a one- and two-year horizon, although model performance varies across countries and sectors.