Wage Increases are no “Productivity Whip“: An Analysis of the East German Manufacturing Sector
Harald Lehmann
Wirtschaft im Wandel,
No. 1,
2003
Abstract
In this paper the results of a microeconomic approach will be analysed. The study consists of the purposition that there could be an onesided relation between the increase in the wage rate and the time-laged increase of productivity. This is of special relevancy for a transforming economy like the east german one. The sample contains firm data of the east german manufacturing sector. The findings are that there is not such a presumed relation. Instead of this you can find a negative relation between changes in wage rate and productivity. This is only valid for a subgroup of firms with rising unit labor costs in the past. These firms deteriorate in contrast to the other firms.
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Currency policy lessons from the failure of the Argentinean currency board
Diemo Dietrich, Axel Lindner
Wirtschaft im Wandel,
No. 15,
2002
Abstract
Die Frage nach der richtigen geldpolitischen Strategie für Länder mit einer nur wenig gefestigten Währung ist nach wie vor offen. Der Wandel der wirtschaftspolitischen Empfehlungen wird wesentlich von Erkenntnissen aus neuen Fallbeispielen wirtschaftspolitischer Experimente bestimmt. Die Wirtschafts- und Finanzkrise von Argentinien bietet eine solche Chance zu lernen. Der Krisenausbruch war mit dem Scheitern des dortigen Currency board verknüpft, einer geldpolitischen Strategie, die in Osteuropa gegenwärtig von Bulgarien, Estland und Litauen verfolgt wird. Der Artikel analysiert anhand des Lehrstücks Argentinien die potenziellen Probleme dieser währungspolitischen Strategie und kommt zu Schlussfolgerungen, die auch für die genannten Länder Osteuropas von Bedeutung sind....
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Possible effects of demographic change - An overview
Gunter Steinmann, Olaf Fuchs, Sven Tagge
Wirtschaft im Wandel,
No. 15,
2002
Abstract
One of the more important influences shaping the future economic conditions of the highly industrialized countries is the decline and aging of their population. The article is a comprehensive survey of the impact of this development on key economic variables and the institutions of the welfare state. While the overall consequence of the aging process on productivity growth is more likely to be negative, there are also some offsetting forces like the increase in the capital intensity. The institutions of the welfare state, which are based on intergenerational transfers, will have to be reformed, in order to bring them in line with the demographic process. The prediction of a decrease in the rate of unemployment as a consequence of a declining labor force is according to our analysis not justified.
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Currency boards of acceding Baltic countries stable and compatible to EU exchange rate mechanism
Hubert Gabrisch, Thomas Linne
Wirtschaft im Wandel,
No. 11,
2002
Abstract
Das Wechselkurssystem der meisten Beitrittskandidaten entspricht zur Zeit nicht dem Wechselkursmechanismus der EU (WKM II). Die EU sieht auch die Currency boards (Estland, Litauen und Bulgarien) als nicht akzeptable Substitute an. Gleichwohl ist die Aufrechterhaltung dieser Systeme auch nach Beitritt zum WKM II unter bestimmten formalen Voraussetzungen möglich. Dann hängt eine Prüfung ihrer Stabilität nur von ökonomischen Kriterien ab. Dazu gehört insbesondere die Frage, ob bei einem Fixkurssystem ohne Band die nur sehr beschränkte geldpolitische Manövrierfähigkeit der Zentralbanken dieser Länder ausreicht, unerwünschte Devisenzuflüsse zu sterilisieren oder gar spekulativen Attacken erfolgreich zu begegnen. Die bisher erfolgreiche Funktionsfähigkeit der Currency boards und die ihr zugrunde liegenden Faktoren wecken wenig Zweifel an der zukünftigen Stabilität im WKM II zumindest im Falle der baltischen Länder. Ebenso unwahrscheinlich ist, dass vom EU-Beitritt negative Anreizwirkungen auf die Fiskal- und Lohnpolitik ausgehen.
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Economic Development 2002 and 2003: Investments – The Achilles Heel of the Economy
Wirtschaft im Wandel,
No. 10,
2002
Abstract
The Article analyses and forecasts the economic developments for the World and German in 2002 and 2003. During the winter 2001/2002 the World Economy was able to pull out of its trough. Nonetheless, the upswing did not reach investments and was mainly driven by consumption and exports in the USA and the remaining major economies, respectively. In the course of this and next year Investors will gradually regain their trust in the economy. The same will be the case for consumers in Germany and Europe. As a result a modest recovery on a wide front will develop. In the course of next year this recovery will start to weaken. In Germany, Wage Policy has retracted from its former moderate stance. Hence, although due to the improving economic conditions and the resulting slowed employment cuts by the end of 2002 as well as employment increases in 2003, the upswing on the labour market will not reach the dynamics of the 1999/2000 recovery. Fiscal Policy, caused by the need to consolidate the public budget, will be restrictive. Despite the low inflation risks, by the end of this year the ECB will have raised its major interest rate by 1/2 percentage point. Nonetheless, as interest rates in real terms will remain at relatively low levels a restrictive impact from the Monetary Policy in Germany and the Euro Area will is not expected. The most important Data for the World Economy and Germany are being stated in detailed tables.
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Consequences of EU enlargement for regional promotion measures in East Germany
Franz Kronthaler, Martin T. W. Rosenfeld
Wirtschaft im Wandel,
No. 9,
2002
Abstract
Consequences of EU enlargement for regional policy in East Germany EU enlargement will change the status of regions currently assisted by EU regional policy. A number of regions will probably lose their status as “Objective 1 Region” and will hence have to exist without EU regional policy funding. Furthermore it has to be assumed that the EU will additionally reduce the maximal permitted regional aid rate for investment in the same regions. Most regions in the East German Länder will be affected by these changes. A “phasing out” of such Objective 1 Regions could ease the adjustment pressures. In anticipating to the probable reduction of the regional aid rate for investment, the development of infrastructure should already today be intensified in order to alleviate locational disadvantages as far as possible.
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Possibilities and limitations of intra-regional exchange rate policy in Southern Africa
Tobias Knedlik
Monitoring Regional Integration in Southern Africa Yearbook, Vol. 2,
2002
Abstract
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Determinants of population development in East and West Germany
Gunter Steinmann, Sven Tagge
Wirtschaft im Wandel,
No. 4,
2002
Abstract
In the long run there will be a change of the size and the structure of the german population because of mortality decline and birth rates below the reproduction level. In this projection we analyze the different effects of variations of fertility, mortality and migration flows on the population. We show, that immigration on a realistic level is not able to compensate the deficit of live births, but can alleviate the shrinking and ageing process of the german population. Without pronatalistic measures, higher than present birth rates are not expected. While, in our simulations, immigration and an increase in fertility could potentially stabilize the population size in the west, this will not occur in the eastern part of Germany. There, the net east-west migration leads to an additional population decline.
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Are the Central and Eastern European Transition Countries still vullnerable to an Financial Crisis? Results from the Signals Approach
Axel Brüggemann, Thomas Linne
IWH Discussion Papers,
No. 157,
2002
Abstract
The aim of the paper is to analyse the vulnerability of the Central and Eastern European accession countries to the EU as well as that of Turkey and Russia to a financial crisis. Our methodology is an extension of the signals approach. We develop a composite indicator to measure the evolution of the risk potential in each country. Our findings show that crises in Central and Eastern Europe are caused by much the usual suspects as in others emerging markets. In particular an overvalued exchange rate, weak exports and dwindling currency reserves have good predictive power for assessing crisis vulnerabilities.
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Bank Concentration and Retail Interest Rates
S. Corvoisier, Reint E. Gropp
Journal of Banking and Finance,
No. 11,
2002
Abstract
The recent wave of mergers in the euro area raises the question whether the increase in concentration has offset the increase in competition in European banking through deregulation. We test this question by estimating a simple Cournot model of bank pricing. We construct country and product specific measures of bank concentration and find that for loans and demand deposits increasing concentration may have resulted in less competitive pricing by banks, whereas for savings and time deposits, the model is rejected, suggesting increases in contestability and/or efficiency in these markets. Finally, the paper discusses some implications for tests of the effect of concentration on monetary policy transmission.
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