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Economic Policy, Profits, and Investment Behavior in West Germany

  • Conference paper
Factors in Business Investment

Part of the book series: Microeconomic Studies ((MICROECONOMIC))

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Abstract

In recent years, the conditions for sustained economic growth seem to have improved noticeably in West Germany. Since the recession at the beginning of the eighties, overall profits have recovered dramatically. From 1982 to 1986, income from entrepreneurial activity and property rose by almost 50 p.c. The share of wages in national income dropped by about 5 percentage points. According to standard economic reasoning the redistribution from wages to profits should have ignited a real investment boom leading to faster growth and higher employment. The more so, since there were no bottlenecks forcing economic policy to restrain the upswing. On the contrary, the economy had returned to price level stability and interest rates had fallen to historically low levels. The public sector deficit had been narrowed, and the current account was running a huge surplus, indicating that there was ample room for expansion.

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Author information

Authors and Affiliations

  1. Institut für Weltwirtschaft, 2300, Kiel, West Germany

    Peter Trapp

Authors
  1. Peter Trapp
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Editor information

Editors and Affiliations

  1. Research Area, Labour Market and Employment, Science Centre Berlin, Reichpietschufer 50, D-1000, Berlin 30, West-Germany

    Michael Funke

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© 1989 Springer-Verlag Berlin Heidelberg

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Trapp, P. (1989). Economic Policy, Profits, and Investment Behavior in West Germany. In: Funke, M. (eds) Factors in Business Investment. Microeconomic Studies. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-48748-4_6

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  • DOI: https://doi.org/10.1007/978-3-642-48748-4_6

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-48750-7

  • Online ISBN: 978-3-642-48748-4

  • eBook Packages: Springer Book Archive

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