Abstract
Since the mid-1990s Germany’s economic performance with respect to GDP growth, the development of unemployment and also the budget deficit has been considerably worse than the Euro area average (Hein and Truger 2005a, 2005b). However, this relative economic weakness might have gone almost unnoticed if it had not been for the slowdown of the world economy after 2000. By the end of 2002 it had become obvious that Germany had been hit much harder by this slowdown and did not manage to recover. For the first time unemployment rose above the Euro area average and the budget deficit exceeded the 3 per cent limit of the European Stability and Growth Pact (SGP).
Keywords
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Arestis, P. and Sawyer, M. (2003) ‘Reinventing Fiscal Policy’, Journal of Post Keynesian Economics, 26: 3–25.
Arestis, P. and Sawyer, M. (2005) ‘Aggregate Demand, Conflict and Capacity in the Inflationary Process’, Cambridge Journal of Economics, 29: 959–74.
Baker, D., Glyn, A., Howell, D. and Schmitt, J. (2004) ‘Labour Market Institutions and Unemployment: A Critical Assessment of the Cross-Country Evidence’, in D.R. Howell (ed.), Fighting Unemployment: The Limits of the Free Market Orthodoxy (Oxford: Oxford University Press).
Bernanke, B. and Gertler, M. (1995) ‘Inside the Black Box: The Credit Channel of Monetary Policy Transmission’, Journal of Economic Perspectives, 9: 27–48.
Bhaduri, A. and Marglin, S. (1990) ‘Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies’, Cambridge Journal of Economics, 14: 375–93.
Bibow, J. (2002) ‘The Monetary Policies of the European Central Bank and Euro’s (Mal)performance: A Stability-oriented Assessment’, International Review of Applied Economics, 16: 31–50.
Bibow, J. (2005a) Europe’s Quest for Monetary Stability: Central Banking Gone Astray, The Levy Economics Institute of Bard College, Working Paper No. 428.
Bibow, J. (2005b) Bad for Euroland, Worse for Germany — the ECB’s Record, The Levy Economics Institute of Bard College, Working Paper No. 429.
Bibow, J. (2006a) Preistreiber Staat: Zur Inflationspersistenz im Euroraum, IMK Report, 6/2006, Macroeconomic Policy Institute (IMK) in the Hans Boeckler Foundation, Duesseldorf.
Bibow, J. (2006b) Inflation Persistence and Tax-push Inflation in Germany and in the Euro Area: A Symptom of Macroeconomic Mismanagement?, IMK Studies, 1/2006, Macroeconomic Policy Institute (IMK) in the Hans Boeckler Foundation, Duesseldorf.
Cecchetti, S.G. (1995) ‘Distinguishing Theories of the Monetary Transmission Mechanism’, Federal Reserve Bank of St. Louis Review, 77 (3): 83–97.
Coalition Contract (2005) Gemeinsam für Deutschland — mit Mut und Menschlichkeit, Koalitionsvertrag zwischen CDU, CSU und SPD vom 11.11.2005, Berlin.
Deutsche Bundesbank (2003) Wege aus der Krise — Wirtschaftspolitische Denkanstöße für Deutschland (Frankfurt: Deutsche Bundesbank).
ECB (2003) ‘The Outcome of the ECB’s Evaluation of its Monetary Policy Strategy’, Monthly Bulletin, June: 79–92.
ECB (2006) Monthly Bulletin, January.
European Commission (2002) Germany’s Growth Performance in the 1990’s, Economic Paper No. 170, Mai 2002 (Brussels: European Commission, Directorate General for Economic and Financial Affairs).
European Commission (2005) Annual Macro-economic Database (AMECO), December 2005, http://europa.eu.int/comm/economy_finance/indicators/annual_macro_economic_database/ameco_en.htm.
Fondazione (2005) The Fondazione Rodolfo Debenedetti Social Reforms Database, http://www.frdb.org/documentazione/centro_doc.php.
Godley, W., Papadimitrou, D.B., Dos Santos, C.H. and Zezza, C. (2005) The United States and Her Creditors, Can the Symbiosis Last?, The Levy Economics Institute of Bard College, Strategic Analysis, September.
Hein, E. (2002) ‘Monetary Policy and Wage Bargaining in the EMU: Restrictive ECB Policies, High Unemployment, Nominal Wage Restraint and Inflation above the Target’, Banca Nazionale del Lavoro Quarterly Review, 55: 299–337.
Hein, E. (2006a) ‘Wage Bargaining and Monetary Policy in a Kaleckian Monetary Distribution and Growth Model: Trying to Make Sense of the NAIRU’, Intervention. Journal of Economics, 3: 305–29.
Hein, E. (2006b) ‘On the (In-)stability and the Endogeneity of the “Normal” Rate of Capacity Utilisation in a Post-Keynesian/Kaleckian “Monetary” Distribution and Growth Model’, Indian Development Review, 4: 129–50.
Hein, E., Muelhaupt, B. and Truger, A. (2001) ‘WSI-Standortbericht 2001: Eine makroökonomische Perspektive’, WSI Mitteilungen, 54: 351–8.
Hein, E. and Niechoj, T. (2007) ‘Guidelines for Sustained Growth in the EU? The Concept and the Consequences of the Broad Economic Policy Guidelines’, in J. McCombie and C. Rodriguez (eds), Institutions, Public Policy and Governance (Basingstoke: Palgrave Macmillan), forthcoming.
Hein, E., Schulten, T. and Truger, A. (2006) ‘Deflation Risks in Germany and the EMU: The Role of Wages and Wage Bargaining’, in E. Hein, A. Heise and A. Truger (eds), The European Union: Current Problems and Prospects (Basingstoke: Palgrave Macmillan).
Hein, E. and Truger, A. (2005a) ‘What Ever Happened to Germany? Is the Decline of the Former European Key Currency Country Caused by Structural Sclerosis or by Macroeconomic Mismanagement?’, International Review of Applied Economics, 19: 3–28.
Hein, E. and Truger, A. (2005b) ‘A Different View of Germany’s Stagnation’, Challenge. The Magazine of Economic Affairs, 48 (6): 64–94.
Hein, E. and Truger, A. (2005c) ‘European Monetary Union: Nominal Convergence, real Divergence and Slow Growth?’, Structural Change and Economic Dynamics, 16: 7–33.
Hein, E. and Truger, A. (2005d) ‘Macroeconomic Coordination as an Economic Policy Concept — Opportunities and Obstacles in the EMU’, in E. Hein, T. Nichoj, T. Schulten and A. Truger (eds), Macroeconomic Policy Coordination in Europe and the Role of the Trade Unions (Brussels: ETUI).
IMF (2003) Deflation: Determinants, Risks and Policy Options — Findings of an Interdepartmental Task Force (Washington, DC: IMF).
IMF (2006) Germany: Selected Issues, Country Report No. 06/17, http://www.imf.org/external/pubs/ft/scr/2006/cr0617.pdf.
Institute (2004) Arbeitsgemeinschaft deutscher wirtschaftswissenschaftlicher Forschungsinstitute, ‘Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Herbst 2004’, DIW Wochenbericht, 43: 629–82.
Institute (2005) Arbeitsgemeinschaft deutscher wirtschaftswissenschaftlicher Forschungsinstitute, ‘Die Lage der Weltwirtschaft und der deutschen Wirtschaft im Herbst 2005’, DIW Wochenbericht, 43: 605–55.
Mabbett, D. and Schelkle, W. (2005) Bringing Macroeconomics Back into the Political Economy of Reform: the Lisbon Agenda and the ‘Fiscal Philosophy’ of EMU, mimeo.
Nickell, S., Nunziata, L., Ochel, W. and Quintini, G. (2002) The Beveridge Curve, Unemployment and Wages in the OECD from the 1960s to the 1990s, Centre for Economic Performance, Discussion Paper 502 (Version May 2002) (London: London School of Economics and Political Science).
OECD (2004) Economic Survey — Germany 2004 (Paris: OECD).
OECD (2005a) Economic Outlook, No. 78, December 2005, http://www.oecd.org/document/61/0,2340,en_2649_201185_2483901_1_1_1_1,00.html.
OECD (2005b) The Economic Outlook Database Inventory, http://www.oecd.org/dataoecd/47/9/2742733.pdf
Palley, T. (1998) ‘Restoring Prosperity: Why the U.S. Model is not the Answer for the United States or Europe’, Journal of Post Keynesian Economics, 20: 337–52.
Papadimitriou, D.P., Shaikh, A.M., Dos Santos, C.H. and Zezza, G. (2005) How Fragile is the U.S. Economy?, The Levy Economics Institute of Bard College, Strategic Analysis, March.
Papadimitriou, D.P., Chilcote, E. and Zezza, G. (2006) Are housing prices, household debt, and growth sustainable?, The Levy Economics Institute of Bard College, Strategic Analysis, January.
Schroeder, G. (2003) ‘Niemand darf sich künftig zu Lasten der Gemeinschaft zurücklehnen’, Frankfurter Rundschau, 15. 3. 2003: 7.
Schulten, T. (2003) ‘Europeanization of Collective Bargaining: Trade Union Initiatives for the Transnational Coordination of Collective Bargaining’, in H.-W. Platzer and B. Keller (eds), Industrial Relations and European Integration: Trans- and Supranational Developments and Prospects (Aldershot: Ashgate).
Schulten, T. (2004) Solidarische Lohnpolitik in Europa. Zur Politischen Oekonomie der Gewerkschaften (Hamburg: VSA).
Statistisches Bundesamt (2006) Volkswirtschaftliche Gesamtrechnungen, Inlands-produktsberechnung, Erste Jahresergebnisse 2005, Fachserie 18, Reihe 1. 1 (Wiesbaden: Statistisches Bundesamt).
SVR (2004) Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, Jahresgutachten 2004/2005, Erfolge im Ausland — Herausforderungen im Inland (Berlin), http://www.sachverstaendigenrat-wirtschaft.de/gutacht/ga-content.php?gaid=40&node=f.
SVR (2005) Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, Jahresgutachten 2005/2006, Die Chance nutzen — Reformen mutig vorantreiben (Berlin), http://www.sachverstaendigenrat-wirtschaft.de/gutacht/ga-content.php?gaid=45&node=f.
Taylor, J.B. (1993) ‘Discretion versus Policy Rules in Practice’, Carnegie Rochester Conference Series on Public Policy, 39: 195–214.
Traxler, F., Mehrmet, E. (2003) ‘Coordination of Collective Bargaining: The Case of Europe’, Transfer. European Review of Labour and Research, 9: 229–46.
Truger, A. and Hein, E. (2002) ‘“Schlusslicht Deutschland” — Makroökonomische Ursachen’, Wirtschaftsdienst, 82: 402–10.
Truger, A. and Jacoby, W. (2004) ‘Tax Reforms and “Modell Deutschland” — Lessons from Four Years of Red-Green Tax Policy’, in J. Sperling (ed.), Germany at 55: Berlin is not Bonn (Manchester: Manchester University Press).
Editor information
Editors and Affiliations
Copyright information
© 2007 Eckhard Hein and Achim Truger
About this chapter
Cite this chapter
Hein, E., Truger, A. (2007). Germany’s Post-2000 Stagnation in the European Context — a Lesson in Macroeconomic Mismanagement. In: Arestis, P., Hein, E., Le Heron, E. (eds) Aspects of Modern Monetary and Macroeconomic Policies. Palgrave Macmillan, London. https://doi.org/10.1057/9780230627345_12
Download citation
DOI: https://doi.org/10.1057/9780230627345_12
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-28354-5
Online ISBN: 978-0-230-62734-5
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)