Why Germany Has Such a Weak Growth Performance

Germany has had an extremely low growth performance since 1995. The paper looks at the long-run reasons for this loss of economic dynamics besides German unification: These include leaving labor idle, a declining share of investment in GDP, a weaker innovative activity, an ineffective system for human capital formation with the exception of vocational training and an erosion of the export position with a reduced attractiveness for foreign direct investment. The issue is raised whether Germany belongs to a new category of economies, the NDCs, the Newly Declining Countries.