The German economy is only gradually regaining momentum after the Covid-19-related slump. Although production bottomed out in April and should quickly make up some of the losses with the easing of the lockdown beginning in May, full recovery from the crisis will take some time. One reason is...

We consider a dynamic general equilibrium model with collective wage bargaining and investigate how unemployment dynamics are affected by two types of budgetary policies. In line with traditional reasoning, a balanced-budget rule amplifies fluctuations in the short run, whereas an...