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German public finances through the financial crisis

Author

Listed:
  • Blömer, Maximilian
  • Dolls, Mathias
  • Fuest, Clemens
  • Löffler, Max
  • Peichl, Andreas

Abstract

The German experience of the crisis was very different compared to those of most other countries in Europe. Germany was hit by a very strong shock which was relatively concentrated in the exporting, manufacturing industries. In addition, the German labour market was very resilient during the crisis due to earlier labour market reforms and policy instruments facilitating labour hoarding. As a consequence, public finances were only moderately affected and not many policy reforms had to be enacted. This chapter will present the German experience of the financial crisis. We start by presenting the macroeconomic situation and how the crisis unfolded in Germany, before focusing on the situation of public finances. Finally, we analyse the policy responses to the financial crisis.

Suggested Citation

  • Blömer, Maximilian & Dolls, Mathias & Fuest, Clemens & Löffler, Max & Peichl, Andreas, 2015. "German public finances through the financial crisis," ZEW Discussion Papers 15-041, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:15041
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    References listed on IDEAS

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    1. Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Automatic stabilizers and economic crisis: US vs. Europe," Journal of Public Economics, Elsevier, vol. 96(3), pages 279-294.
    2. Ulf Rinne & Klaus F Zimmermann, 2013. "Is Germany the North Star of Labor Market Policy?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(4), pages 702-729, December.
    3. Tito Boeri & Herbert Bruecker, 2011. "Short-time work benefits revisited: some lessons from the Great Recession [‘Reversed roles? Wage and employment effects of the current crisis’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 26(68), pages 697-765.
    4. Karl BRENKE & Ulf RINNE & Klaus F. ZIMMERMANN, 2013. "Short-time work: The German answer to the Great Recession," International Labour Review, International Labour Organization, vol. 152(2), pages 287-305, June.
    5. Malte Hübner, 2010. "Das Wachstumsbeschleunigungsgesetz: Eine makroökonometrische Analyse," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 90(4), pages 240-247, April.
    6. Ulf Rinne & Klaus Zimmermann, 2012. "Another economic miracle? The German labor market and the Great Recession," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-21, December.
    7. Christian Dustmann & Bernd Fitzenberger & Uta Sch?nberg & Alexandra Spitz-Oener, 2014. "From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 167-188, Winter.
    8. Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2011. "Distributional Consequences of Labor-demand Shocks: The 2008-09 Recession in Germany," CESifo Working Paper Series 3403, CESifo.
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    Cited by:

    1. Santiago Lago-Peñas & Jorge Martinez-Vazquez & Agnese Sacchi, 2020. "Fiscal stability during the Great Recession: putting decentralization design to the test," Regional Studies, Taylor & Francis Journals, vol. 54(7), pages 919-930, July.
    2. Costas Lapavitsas, 2019. "Political Economy of the Greek Crisis," Review of Radical Political Economics, Union for Radical Political Economics, vol. 51(1), pages 31-51, March.
    3. Lars P. Feld & Ekkehard A. Köhler & Julia Wolfinger, 2020. "Modeling fiscal sustainability in dynamic macro-panels with heterogeneous effects: evidence from German federal states," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(1), pages 215-239, February.
    4. Nicoletta Batini & Alessandro Cantelmo & Giovanni Melina & Stefania Villa, 2021. "How loose, how tight? A measure of monetary and fiscal stance for the euro area," Oxford Economic Papers, Oxford University Press, vol. 73(4), pages 1536-1556.
    5. Hudepohl, Tom & van Lamoen, Ryan & de Vette, Nander, 2021. "Quantitative easing and exuberance in stock markets: Evidence from the euro area," Journal of International Money and Finance, Elsevier, vol. 118(C).
    6. Maximilian Joseph Blömer & Andreas Peichl, 2020. "The ifo Tax and Transfer Behavioral Microsimulation Model," ifo Working Paper Series 335, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

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    More about this item

    Keywords

    crisis management; financial crisis; redistribution; budget deficit and debt;
    All these keywords.

    JEL classification:

    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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