In recent years, a lot of rules concerning government expenditures as well as tax revenues were changed in Germany. Government expenditures in relation to GDP were reduced, income tax rates were lowered and the budget deficit declined. The structure of government expenditures changed in favor of...

Between 1995 and 2005, the German economy has experienced a phase of weak economic growth. We analyze whether this weak growth performance can be attributed to the stance of monetary conditions during that period. We show that the real effective exchange rate did have almost no dampening effects...

In many countries, fiscal policy became strongly expansionary in order to fight the recession. Structural budget deficits increased sharply and might remain high after the end of the recession. This would raise real interest rates and would impair economic growth. Some measures to reduce the...

Germany remains Europe's largest and most diversified source of new technology, but still lags in the fastest growing areas of today's high technology. After World War II, West-German technology policy sought to rebuild the institutions which had supported Germany's leadership in the high-tech...

In the nineties, the German economy grew about half a percentage point less than the rest of the European Monetary Union (EMU). The paper deals with differences in fiscal policy as a potential reason for this. At least a part of the “growth gap” between Germany and the rest of the EMU can be...

Facing very modest GDP growth in Germany in 2001 and 2002, it is investigated if potential output will – as usually expected – grow by 1.5 to 2.0 percent until 2005. The incentives to work and to invest and their changes in the nineties are analyzed. Given the foreseeable changes of these...

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...