Konjunktur auf der Kippe — Handlungsoptionen finden?

The latest economic forecasts have been revised downwards. This correction is not surprising, since earlier optimism was based on the assessment that the crisis in the euro area had been largely overcome. Furthermore, country risks remain high, new geopolitical conflicts have arisen and emerging markets are becoming less dynamic. Conventional monetary policy has reached the limit of its possibilities. It requires a fiscal policy support, but the fiscal pact and other political commitments by governments impose tight constraints. The question arises whether the economy needs only short-run impulses. Some authors state that the long period of stagnation since 2011 is essentially structural. Moderate German GDP figures are in line with the poor condition of the country’s potential output growth. Thus, launching stimulus programmes would further increase the risk of overheating, as the country would remain exposed to an extremely expansionary monetary environment. Achieving stronger sustainable growth requires structural reforms that strengthen long run productivity progress. The authors are convinced that economic policymakers should realise that Keynesian policies do not work in an environment of supply-side problems. Copyright ZBW and Springer-Verlag Berlin Heidelberg 2014