Workforce segmentation in Germany : from the founding era to the present time

Despite a more recent debate about ever deeper segmentation, the authors argue that since industrialization, Germany has continually experienced a dual labor market. One segment contains the primary segment of better paid and more attractive jobs, while the secondary segment encompasses rather low paid, less stable and less attractive jobs. Dualization is the result of firms which are likely to hire full-time and long-term workforce for its core activities while relying on more flexible forms of employment for other activities. Based on an in-depth examination of the structure of the workforce since 1871, the article investigates the factors which account for the origin, evolution and the peculiarities of the country’s core workforce. The authors show that a non-negligible part of the working population has always been subjected to marginalization, but that the dividing line between the two segments has changed over time as has the character of the respective groups

Correlations in a band insulator

We study a model of a covalent band insulator with on-site Coulomb repulsion at half-filling using dynamical mean-field theory. Upon increasing the interaction strength the system undergoes a discontinuous transition from a correlated band insulator to a Mott insulator with hysteretic behavior at low temperatures. Increasing the temperature in the band insulator close to the insulator-insulator transition we find a crossover to a Mott insulator at elevated temperatures. Remarkably, correlations decrease the energy gap in the correlated band insulator. The gap renormalization can be traced to the low-frequency behavior of the self-energy, analogously to the quasiparticle renormalization in a Fermi liquid. While the uncorrelated band insulator is characterized by a single gap for both charge and spin excitations, the spin gap is smaller than the charge gap in the correlated system.Comment: 7 pages, 7 figure

Authors: The Members of the European Economic Advisory Group at CESifo 2008

Authors of the Report on the European Economy 2008

Chapter 2: A New Crisis Mechanism for the Euro Area

The European debt crisis followed the US financial crisis with a delay of one and a half years. While its first signs were visible in November and December of 2009 when the rating agency Fitch downgraded Ireland and Greece, it culminated on 28 April 2010 when the intra-day interest rate for two-year Greek government bonds peaked at 38 percent. Since then capital markets have been extremely unstable, showing signs of distrust in the creditworthiness of the GIPS countries: Greece, Ireland, Portugal and Spain. The European Union reacted by preparing voluminous rescue plans that, at this writing (January 2011), have been resorted to by Greece and Ireland.

Chapter 3: The effect of globalisation on Western European jobs: curse or blessing?

This chapter analyses the impact of increased economic integration with low-wage economies on Western European jobs: the message is that when taking all effects into account, globalisation is more likely in the end to raise rather than to reduce employment, because it will help making labour markets more flexible. The challenge for policy is to counter adverse income distribution effects, but to do so in a way that employment is not harmed.

Chapter 4: Industrial policy

This chapter argues against using industrial policy to protect European firms from international competition because of the long-run costs that are likely to arise. Industrial policy should be horizontal rather than sector-based and it should be located mainly at the regional and EU level, but cut back at the national level.

Chapter 1: The Macroeconomic Outlook

The structural problems brought to light by the financial crisis have largely remained in place or shifted from the private (banking) sector to the public sector. In the United States, despite increased saving, household debt remains high; their wealth position has deteriorated substantially due to the bursting of the house price bubble. The real estate sector has shrunk, and the financial sector has still not fully recovered.

Chapter 2: How much real dollar depreciation is needed to correct global imbalances?

A crucial issue for macro developments in Europe is how large and persistent the depreciation of the US dollar against the euro will be. This chapter offers an in-depth analysis of this.