Minimum Wages And Employment: The Case Of German Unification
Analysis in terms of the two-sector open economy shows that in bringing the market economy to East Germany, West Germany seems to have disregarded important fundamentals. Premature formation of a currency union led to a substantial real appreciation of the East German currency. Premature implementation of the West German system of wage bargaining resulted in inappropriate minimum wage schedules. Both measures made East German production possibilities and employment decline. [E24, P23]
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Volume (Year): 17 (2001)
Issue (Month): 1 ()
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References listed on IDEAS
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- Hans-Werner Sinn, 1995. "Staggering along: wages policy and investment support in East Germany," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(4), pages 403-426, December.
- Dornbusch, Rudiger, 1993. "The End of the German Miracle," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 881-85, June.
- Marcus Noland & Sherman Robinson & Li-Gang Liu, 1997.
"The Economics of Korean Unification,"
Working Paper Series
WP97-5, Peterson Institute for International Economics.
- Kennan, J., 1995.
"The Elusive Effects of Minimum Wages,"
9512, Wisconsin Madison - Social Systems.
- Gerlinde Sinn & Hans-Werner Sinn, 1994. "Jumpstart: The Economic Unification of Germany," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691728, December.
- Richard A. Brecher, 1974. "Minimum Wage Rates and the Pure Theory of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 88(1), pages 98-116.
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