Unemployment in Germany: Reasons and Remedies

This paper discusses the reasons for the dismal labor market performance of Germany over the last three decades along with potential remedies. It argues that labor market rigidities along with a generous welfare state in conjunction with certain changes in the economic environment are important in explaining this development but cannot solely account for it. Barriers to entrepreneurship, to setting up new firms and to innovations which are prevalent on goods and capital markets also play an important role in explaining the lackluster German economic performance of which rising unemployment is only one part. Comprehensive institutional reforms are therefore called for.unemployment, Germany, labor market reforms, venture capital, innovations

Labor market policy in the new economy

--

Nation size and unemployment

Throughout the world, strong dispersions of both regional and national unemployment rates can be observed. The economic theory has developed various explanations on how this differences occur. Corresponding models mainly aim at institutional and political framework, insider effects, efficiency wages, collective bargaining and cyclical effects. However, the size of economies has received little attention in this discussion. In this paper, we will show that there is indeed a strong link between size and unemployment. Using data from 37 countries, 15 continents and trade areas as well as 496 federal states, we will demonstrate that larger economic regions tend to have higher unemployment rates. Subsequently, we show that this correlation is strongly determined by the degree of centralization of countries. Based on these findings, we develop a model that explains regional and national unemployment using size and centralization. We will point out that centralization parabolas can be derived for each country. These curves are strongly influenced by the size of economies in a way that different sizes lead to a shift of the parabolas. As we will demonstrate, country-specific parabolas explain the strong dispersion of unemployment rates quite accurately. --unemployment,size,centralization

The struggle between equity and efficiency: do Nordic countries have a free lunch?

Although there is a vast theoretical literature on the existence of a tradeoff between equity and efficiency, empirical investigations often fail to find evidence for this proposition. Furthermore there are hints that some social models in Europe can cope better with this trade-off and are actually able to provide what economists call a free lunch. In this paper we use data from the Luxembourg Income Studies (LIS) to evaluate (a) whether there really exists something like a free lunch and (b) whether some social systems are actually better in coping with the trade-off between equity and efficiency. --equity,efficiency,tradeoff,welfare states

Unemployment in Germany: reasons and remedies

--

Terra incognita, Wirtschaftskrise und Unternehmertum

Dem Staat sind bei der Bewältigung der Finanzkrise umfangreiche Aufgaben zugewachsen. Das Potential des freien Unternehmertums wird dabei eher vernachlässigt. Inwieweit können die privaten Unternehmer zu einem neuerlichen Aufschwung beitragen? Welche Voraussetzungen sollte der Staat schaffen, um ihnen dies zu erleichtern