IDEAS home Printed from https://ideas.repec.org/a/psl/bnlaqr/200323.html
   My bibliography  Save this article

On the 'burden' of German unification

Author

Listed:
  • Jorg Bibow

    () (Hamburg Universität, ISTOE, VMP 5, 20146 Hamburg (Germany))

Abstract

This paper investigates the causes of western Germany's remarkably poor performance since 1992. It challenges the view that Germany's poor economic record and marked deterioration in public finances since unification might be largely attributable to that event. Instead, the analysis highlights that Germany's approach to macroeconomic policymaking has starkly conflicted with economic theory and best practice. Not theunification "shock" itself, but the ill-guided fiscal and monetary policies pursued since 1991 caused the severe and protracted de-stabilization of western Germany--and today's ongoing crisis.

Suggested Citation

  • Jorg Bibow, 2003. "On the 'burden' of German unification," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 56(225), pages 137-169.
  • Handle: RePEc:psl:bnlaqr:2003:23
    as

    Download full text from publisher

    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9896/9778
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jorg Bibow, 2001. "Easy Money through the Back Door: The Markets vs. the ECB," Economics Working Paper Archive wp_323, Levy Economics Institute.
    2. Weeber, Joachim, 1993. "Staatlich verursachter Preisauftrieb auf der Verbraucherstufe?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 73(12), pages 645-648.
    3. Barry Eichengreen, 1997. "Saving Europe's Automatic Stabilisers," National Institute Economic Review, National Institute of Economic and Social Research, vol. 159(1), pages 92-98, January.
    4. Francesco Giavazzi & Marco Pagano, 1990. "Can Severe Fiscal Contractions Be Expansionary? Tales of Two Small European Countries," NBER Chapters,in: NBER Macroeconomics Annual 1990, Volume 5, pages 75-122 National Bureau of Economic Research, Inc.
    5. Svensson, Lars E. O., 1994. "Fixed exchange rates as a means to price stability: What have we learned?," European Economic Review, Elsevier, vol. 38(3-4), pages 447-468, April.
    6. John B. Taylor, 2000. "Reassessing Discretionary Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 21-36, Summer.
    7. Gustav Adolf Horn & Wolfgang Scheremet, 1999. "Erfolgreiche Konsolidierung des amerikanischen Staatshaushalts - ein Beispiel für Europa?," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 66(12), pages 227-233.
    8. Arestis, Philip & McCauley, Kevin & Sawyer, Malcolm, 2001. "An Alternative Stability Pact for the European Union," Cambridge Journal of Economics, Oxford University Press, vol. 25(1), pages 113-130, January.
    9. Barry Eichengreen & Charles Wyplosz, 1998. "The Stability Pact: more than a minor nuisance?," Economic Policy, CEPR;CES;MSH, vol. 13(26), pages 65-113, April.
    10. Weeber, Joachim, 1997. "Preisschub durch den Staat?," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 77(10), pages 592-597.
    11. Jörg Bibow, 2001. "Easy Money through the Back Door: The Markets vs. the ECB," Macroeconomics 0103004, University Library of Munich, Germany.
    12. Weeber, Joachim, 1994. "Ein Index staatlich administrierter Verbraucherpreise," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW – German National Library of Economics / Leibniz Information Centre for Economics, vol. 74(11), pages 592-596.
    13. Bertola, Giuseppe & Drazen, Allan, 1993. "Trigger Points and Budget Cuts: Explaining the Effects of Fiscal Austerity," American Economic Review, American Economic Association, vol. 83(1), pages 11-26, March.
    14. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
    15. von Hagen, Jurgen, 1992. "German unification: Economic problems and consequences : A comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 36(1), pages 211-221, July.
    16. Gerlinde Sinn & Hans-Werner Sinn, 1994. "Jumpstart: The Economic Unification of Germany," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691728, January.
    17. Horst Siebert, 1997. "Labor Market Rigidities: At the Root of Unemployment in Europe," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 37-54, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daniel Detzer & Eckhard Hein, 2014. "Finance-dominated capitalism in Germany – deep recession and quick recovery," Working papers wpaper54, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    2. Eckhard Hein & Daniel Detzer, 2015. "Finance-Dominated Capitalism and Income Distribution: A Kaleckian Perspective on the Case of Germany," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 1(2), pages 171-191, July.
    3. Detzer, Daniel & Hein, Eckhard, 2014. "Financialisation and the financial and economic crises: The case of Germany," IPE Working Papers 44/2014, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

    More about this item

    Keywords

    Macroeconomics; Monetary; Policy Making;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:psl:bnlaqr:2003:23. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carlo D'Ippoliti). General contact details of provider: http://www.economiacivile.it .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.