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...

The paper investigates the relation between effective demand, income distribution and unemployment empirically. Its aim is to evaluate Keynesian, Kaldorian and neoclassical hypotheses about the determination of labor market variables. To do so, a vector autoregression model consisting of capital...