This is a preview of subscription content, log in via an institution to check access.
o
Economic Trends, in: Economic Bulletin, no. 1, vol. 34, January 1997.
There are no longer reliable statistical data on this question. Given, however, that eastern Germany undoubtedly posts a severe trade deficit, there can be little doubt that this conclusion is correct.
For the sake of consistency, supply side theory ought to see this in the same terms as increased public borrowing, due to the increased pressure it places on global capital markets, raising interest rates and thus crowding out private domestic investment.
To give an example “ in the course of last year the thorny problems of employment were exacerbated further. There are many reasons for this. Structural problems and the lack of flexibility on the labour market play a role just as do the rising competitive pressure from abroad… Therefore it is our view that priority should be accorded to dealing with the structural reasons for unemployment.” (Protocol of the press conference held on 17 April 1997 (p.5).
Such as the Council of Economic Experts in their annual report on the state of the economy (Jahresgutachten 1996/97, Paragraph 315).
Current data are not available on this question; over the long-term, though, there is a secular trend towards a declining capital productivity.
Of course the result is the same for the nominal values of both variables.
Author information
Consortia
Rights and permissions
About this article
Cite this article
‘Arbeitskreis Konjunktur’ in the DIW (Study Group ‘Business Cycle’). German economic trends 1997/98: Domestic demand remains weak. Economic Bulletin 34, 9–26 (1997). https://doi.org/10.1007/s10160-997-0028-7
Issue Date:
DOI: https://doi.org/10.1007/s10160-997-0028-7