INESS

The illusory truth effect is a psychological phenomenon describing the tendency to believe false information to be correct after repeated exposure. One example I can think of in Slovakia is the statement about \"cherry-picking\" in the hospital sector. Lower-tier hospitals cherry-pick the easy and profitable patients and send the rest to the larger state hospitals, which then make economic losses on them.

I often hear the phrases \'real price\' or \'justified price\', for example, in the question of ambulances or hospitals. They make my economic hair stand on end. It reminds me of how deeply embedded healthcare is in the price thinking of planned economics. Before 1989 in Slovakia, the whole economy was run on the principle of price. A manager in a company calculated the price of steel, plastic, and man-hours to produce one Škoda 120 car, for example.

The wonderful thing about economics is that it recognizes truths about the world that laypeople cannot intuitively grasp, based on simple statements about human action. Consider two concepts: opportunity costs and marginal decision-making based on marginal benefits and costs. If you really understand these two concepts, then it must seem normal to you that there is such a thing as optimal environmental pollution.

Several existing competitiveness rankings assess factors like law enforcement, infrastructure, and tax law from a business perspective. However, these often lack an accessible, practical translation of how these factors impact the daily operations of small businesses. The Bureaucracy Index was launched in 2016 by the Institute of Economic and Social Studies (INESS) to address this gap.

I recently overheard an interview in which the irrationality of Slovaks who refuse to buy more economically advantageous electric cars was criticized. Quite often, I encounter the fact that owners of electric vehicles fail to look at this problem through the eyes of the average driver. First, it is important to realize that the average Slovak drives either a second-hand car or his old car. In September alone, 5,000 individually imported cars were registered in Slovakia.

Russia\'s economic landscape is under strain. In this interview, Martin Vlachynsky, an analyst from INESS, sheds light on the complexities of Russia\'s current economic policies, their implications for businesses and ordinary citizens, and how the ongoing war continues to shape the country\'s financial reality.

The current process of negotiating salary increases for public servants should also be seen in the context of international comparisons. Slovakia spends the most on salaries in the whole V4, not only as a share of total public administration expenditure but also as a share of GDP. In these comparisons, Slovakia spends more than the EU average.

In its program statement, the government announced its intention to increase the progressivity of personal taxation. In the budget plan, it already speaks specifically of the intention to \"introduce 3rd and 4th personal income tax rates from 2025,\" which is expected to increase public revenues by EUR 78 million. A 3rd rate of 30% is to apply to annual personal income above EUR 80 000.

The EU recently adopted a directive to tackle the gender pay gap by introducing new bureaucratic obligations for employers. Similarly, the EU is pushing on other issues in the fight for gender equality, for example in the area of the low proportion of women in STEM (science, technology, engineering, and mathematics) subjects, which reaches 33%. Consequently, women make up the same proportion (33%) of employees in technical sectors.

On April 30, 2024 - almost exactly one year later - INESS, in cooperation with the Austrian Economics Center, organized the popular Free Market Road Show - and again on a highly topical subject. This year marks not only the 20th anniversary of Slovakia\'s EU membership but also our 20 years in the European Single Market, which recently celebrated its 30th birthday.