A growing literature concludes that modern democracies have not adopted policies that benefit the majority to the extent predicted by social conflict theory. The most prominent reason is that globalization ties the hands of policymakers, making it hard for them to redistribute. Yet while...

This paper provides empirical evidence of interregional risk sharing in reunified Germany. The focus is on two related questions: First, to what extent do private institutions and the public sector provide insurance against asymmetric shocks to individual regions? Second, to what extent does the...

The German experience of the crisis was very different compared to those of most other countries in Europe. Germany was hit by a very strong shock which was relatively concentrated in the exporting, manufacturing industries. In addition, the German labour market was very resilient during the...