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Germany's poor economic performance in the last decade: it's the macroeconomy, not institutional sclerosis
[working paper]
Corporate Editor
Wirtschafts- und Sozialwissenschaftliches Institut in der Hans-Böckler-Stiftung
Abstract "This paper challenges the institutional sclerosis explanation of the German crisis according
to which rigid labour markets and generous welfare state institutions have driven Germany
into its position as 'Europe's sick man'. In general, the explanation is not convincing,
because the underlying hypo... view more
"This paper challenges the institutional sclerosis explanation of the German crisis according
to which rigid labour markets and generous welfare state institutions have driven Germany
into its position as 'Europe's sick man'. In general, the explanation is not convincing,
because the underlying hypotheses about the effects of labour market regulation and welfare
state institutions on employment and growth cannot unambiguously be derived from modern
labour market theory and are at least partially at odds with accepted empirical findings. In
particular, the explanation is unconvincing, because in international comparison Germany´s
labour market and welfare state institutions are simply not as sclerotic as often supposed. In
most of the aggregate indicators for structural rigidities Germany is not worse than the
average OECD or EU country. Moreover, there is a macroeconomic explanation focusing on
the combined effects of restrictive and procyclical monetary, fiscal and wage policy in
Germany that is broadly consistent with mainstream macroeconomics and is well backed by
empirical data." (author's abstract)... view less
Keywords
economic development (on national level); welfare state; effect on employment; deregulation; economic situation; economic policy; Federal Republic of Germany; economic crisis; labor market policy; unemployment; macroeconomics
Classification
Political Economy
Economic Policy
Document language
English
Publication Year
2003
City
Düsseldorf
Page/Pages
44 p.
Series
WSI-Diskussionspapier, 118
Licence
Deposit Licence - No Redistribution, No Modifications
Data providerThis metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne