25 Jahre IWH

Neoclassical versus Keynesian approaches to Eastern German unemployment: a rejoinder to Merkl and Snower

This rejoinder contrasts a Keynesian approach for explaining unemployment in Germany’s eastern region with a neoclassical, market-failure approach advanced by Christian Merkl and Dennis Snower: A skewed distribution of headquarters favoring the western region, combined with insufficient levels of effictive demand for output – and subsequently for labor – are argued to be the key causes of persistent unemployment. Seven tables offer a comparative approach to output, investment, and labor demand in Germany’s eastern and western regions, noting the emergence and persistence of „involuntary“ unemployment appearing as a jobs‘ gap in the eastern region, especially for services.

29. Juli 2008

Autoren Udo Ludwig John B. Hall

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