An Employment Policy without Inflation

  • Herbert Giersch
Part of the Trade Policy Research Centre book series (TPRC)


In the seventh German Bundestag election campaign, two theories were put forward which seem to be mutually exclusive. One side supported the view that inflation is better than unemployment, with the implication that inflation is necessary for full employment to be maintained. The other side declared bluntly that inflation endangers full employment and that stability in the value of money is indispensable for full employment. Full employment through inflation or through the stable value of money—this became the central question in the election disputes of 1972 in the Federal Republic of Germany. Which side is right?


Real Exchange Rate Real Wage Full Employment Nominal Wage Phillips Curve 
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Copyright information

© Trade Policy Research Centre 1989

Authors and Affiliations

  • Herbert Giersch

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