Clemens Jobst, 19 July 2011

The debate over TARGET balances and whether there is an ongoing stealth bailout in the Eurozone has attracted attention from top economists and journalists in the past month. This column argues that the reason why the arguments keep dragging on is the lack of a clear framework for the discussion, something this column aims to provide.

Stefan Bach, Giacomo Corneo, Viktor Steiner, 29 June 2011

With governments under pressure to lower their debt, they may look to increase revenue is by raising taxes for top earners. This column considers the viability of such a move in the case of Germany. It finds that the current top rate of tax of 45% is well below optimal.

Nicolas Véron, 23 June 2011

As the Eurozone crisis continues, politicians are blaming the markets and the markets are blaming politicians. This column argues that the uneasy relationship between the two is nothing new and that the markets have a point. It says the crisis is as much institutional as it is financial or fiscal.

Karl Whelan, 09 June 2011

In a recent Vox column, Hans Werner Sinn of the prestigious Institute for Economic Research claims that the German Bundesbank is effectively propping up banks across the Eurozone’s periphery. He adds that doing this risks a major crisis. Here, Karl Whelan of University College Dublin argues that Professor Sinn’s analysis is incorrect and that his policy prescriptions are extremely unhelpful and even dangerous.

Nico Voigtländer, Joachim Voth, 22 May 2011

Is violence a cultural trait passed from one generation to the next? This column examines an extreme case – anti-Semitism in Germany. It shows that towns that murdered their Jews during the Black Death (1348-1350) were also much more likely to commit violence or engage in anti-Semitic acts in interwar Germany, nearly 600 years later. This suggests racial hatred can persist over centuries.

Hermann Gartner, Christian Merkl, 09 March 2011

Policymakers the world over are staring at the strength of the German economy with envious eyes. This column argues that the root of Germany’s miracle lies in its “wage moderation” that was the result of labour-market policies in the years preceding the global crisis – a point that is often ignored in the public debate.

Uri Dadush, Vera Eidelman, 06 March 2011

Global imbalances and their effects on the global economy are much discussed. This column says that discussing global imbalances is popular because it is the easy way out. It says that policymakers should target the illness rather than the symptoms by reforming their domestic economies and focusing on sustainable growth.

Monika Merz, Andreas Haufler, Wolfram Richter, Bernd Lucke, 24 February 2011

The European rescue fund is steeped in controversy. This column argues that both the fund and the case to keep it permanently are unjustified. It says that they create the wrong incentives and that they will only further intensify the debt crisis in Europe, at the risk of undermining the foundations of the EU itself. It calls on the German government to act.

Avinash Persaud, 16 February 2011

Criticism of China’s exchange-rate policy continues throughout the US. This column argues that the US is in fact the exchange rate manipulator, due to its ongoing quantitative easing. What the US needs to do for a sustainable turnaround is to learn from other successful economies like China and Germany – not de-rail them.

Anna Iara, Guntram Wolff, 20 January 2011

The Eurozone crisis has whetted the appetite for economic governance reform in the EU, with one high-profile proposal aiming to strengthen national fiscal frameworks. With a unique data set, this column shows that stronger fiscal rules in Eurozone member states reduce sovereign risk, especially in times of high uncertainty. If followed, these rules could reduce sovereign yield spreads by up to 100 basis points.

Sergio de Nardis, 02 December 2010

The global imbalances debate regularly singles out China as the champion of exporting countries, often neglecting the role of Germany. This column argues that if Germany does not adjust, it will keep dragging down EU growth. Europe’s other countries, for their part, should silence their rhetoric on manufacturing and go back to focusing on the service sector.

Chunding Li, John Whalley, Yan Chen, 08 October 2010

As the debate over global imbalances develops, this column asks whether the discussion is based on faulty data. Using data from the US, Japan, Germany, and the Czech Republic, it argues that not taking due account of foreign affiliate sales leads to a warped view of trade in goods and services.

Joshua Aizenman, Rajeswari Sengupta, 05 October 2010

Are China and Germany both responsible for the global imbalances? Using four decades of current-account data, this column argues that the role of the US should not be overlooked. A rise in the US’ current-account deficit is matched one for one with a rise in China and Germany’s surpluses. But this relationship – and the global imbalances with it – may well be coming to an end.

Dieter Urban, Christoph Moser, 06 September 2010

Is international trade a source of widening wage inequality in industrial countries? This column shows that export activity in Germany contributes to wage inequality among workers with different levels of skill, but diminishes wage gaps in German manufacturing between men and women and between German citizens and non-citizens.

Paolo Manasse, 26 July 2010

Are Europe’s budgets cuts too little too late or too much too soon? This column asks how each country’s adjustments compare with the European average. It finds that Germany and the Netherlands are ahead of the pack along with highly indebted nations such as Spain, but Italy is lagging far behind.

Paolo Manasse, 24 July 2010

Despite the lack of formal mechanisms for fiscal coordination across Europe, this column suggests that the planned exit strategy seems to support convergence among European countries aiming to cut deficits. Yet it argues that the budget cuts do not reflect the unemployment situation of member countries and appear inspired by Germany's fiscal orthodoxy.

Dalia Marin, 20 June 2010

Discussions about the current-account imbalance within the Eurozone have focused on the under-competitive periphery and super-competitive Germany. This column suggests that the argument ignores one powerful way that Germany lowered its relative unit labour costs. German firms offshored parts of their production to the new member states in Eastern Europe, Russia, and the Ukraine.

Alberto Alesina, Roberto Perotti, 17 June 2010

Many analysts blame Germany’s fiscal prudence for worsening the crisis. This essay argues that the monomaniacal focus on aggregate demand is based on slightly outdated and oversimplified Keynesianism. The real constraint on European growth is not Germany’s fiscal policy. It is the supply side rigidities that plague all European nations – especially those at the heart of this crisis. The demand side matters, but is it foolish to think that German budget deficit of 5% instead of 3% of GDP would solve Europe’s problems.

Gabriel Felbermayr, Mario Larch, Wolfgang Lechthaler, 01 May 2010

How do labour market reforms in one country affect its trading partners? Politicians often appear to assume detrimental spillover effects from labour market reforms abroad. This column argues that recent models of trade and unemployment highlight beneficial linkages, and this is confirmed by empirical work.

Francesco Giavazzi, 21 April 2010

Should Germany keep running a trade surplus? This column argues that any decision should be based on Germany’s interests alone. But new data suggests that its investments in southern Europe may be at risk of being wasted because the euro has removed the need for these countries to pay risk premiums. Germany might therefore consider cutting its surplus and boosting domestic consumption.

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