With the abolition of exchange rates the role of wage formation in the European Monetary Union changes fundamentally and national economic policy in particular fiscal policy faces new restrictions. These are analysed in the first two chapters. A major impact is expected for wage formation. To...

According to a widespread view, Germany's unemployment crisis is caused by rigid labour markets, low profitability and increasing international competition. We argue that this view does not provide a convincing explanation for the dramatic rise in Germany's unemployment rate since 1989, first...