Germany has experienced a period of extreme nominal and real wage moderation since the mid-1990s. Contrary to the expectations of liberal economists, this has failed to improve Germany's mediocre economic performance. However, Germany is now running substantial current account surpluses. One...

This paper estimates the effects of outward FDI on domestic business investment in Germany at the industry level for a panel of 19 industry and 10 services sectors. We pay particular attention to the different motivations behind FDI, and distinguish between FDI to high-versus low-wage countries,...

Ten years after its introduction, the Euro is in an existential crisis. The crisis is the outcome of economic policies that have aimed at labour market flexibility and financial integration. This paper argues, firstly, that the aggregate demand regime in the Euro area is wage led. While an...

The aim of the paper is to compare the NAIRU hypothesis regarding ­European unemployment and a Keynesian approach to the issue and to evaluate them econometrically. For the NAIRU explanation, wage push variables are key in explaining the rise of European unemployment, for a Keynesian approach...

High expectations were placed on the project of European economic integration and Austria's participation in it. Economists had expected that the Single Market would provide a positive supply shock, i.e. rising productivity, resulting in more growth. The optimistic forecasts for neither the EU...