Archive for February 4th, 2014

Did Germany perform better in the 2008 crisis because of labor market reforms?

February 4, 2014

There are several answers to this question. Some say it is labor market reforms in 2000s which made Germany’s labor markets more flexible. Then there are others that say it was the export markets. Some more say much was because of Germanyjoining EZ as with D-Mark , currency would have appreciated leading to lower exports. And so on..

This piece in voxeu comes with a new evidence. It says what mattered was this decentralisation of wage bargaining process post Germany reunification. It pushed workers into accepting  lower wages as otherwise firms would have shifted to cheaper locations. This led to so called lower unit costs for the country:

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From James Bond’s licence to kill to central banker’s licence to lie

February 4, 2014

Anatole Kaletsky (chief economist of GaveKal Dragonomics) has this superb piece.

He says the central bankers have a licence to lie and they do the job really well.

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