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On the 'burden' of German unification

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  • 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," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 56(225), pages 137-169.
    • Handle: RePEc:psl:bnlqrr:2003:23
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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/9896/9778
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    References listed on IDEAS

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    Cited by:

    1. Jorg Bibow, 2004. "Fiscal Consolidation: Contrasting Strategies & Lessons From International Experiences," Economics Working Paper Archive wp_400, Levy Economics Institute.
    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. Jorg Bibow, 2005. "Bad for Euroland, Worse for Germany: The ECB's Record," Economics Working Paper Archive wp_429, Levy Economics Institute.
    4. Detzer, Daniel & Hein, Eckhard, 2014. "Finance-dominated capitalism in Germany: Deep recession and quick recovery," IPE Working Papers 39/2014, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    5. Jorg Bibow, 2004. "Assessing the ECB's Performance since the Global Slowdown: A Structural Policy Bias Coming Home to Roost?," Economics Working Paper Archive wp_409, Levy Economics Institute.
    6. 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).
    7. Jorg Bibow, 2002. "The Monetary Policies of the European Central Bank and the Euro's (Mal-)Performance: A stability-oriented assessment," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(1), pages 31-50.
    8. Eckhard Hein & Achim Truger, 2005. "Macroeconomic policies, wage developments, and Germany’s stagnation," Macroeconomics 0508015, University Library of Munich, Germany.
    9. Joerg Bibow, 2006. "Inflation Persistence and Tax-Push Inflation in Germany and in the Euro Area: A Symptom of Macroeconomic Mismanagement?," IMK Studies 01-2006, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.

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    More about this item

    Keywords

    Macroeconomics; Monetary; Policy Making;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • 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

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