Bofinger, Peter, (2015), “German wage moderation and the EZ Crisis”, Voxeu, 30 November
The EZ ‘consensus narrative’ argues the Crisis should not be thought of as a government debt crisis in its origin. Instead it regards large intra-EZ capital flows that emerged in the decade before the Crisis as the real culprit. This column argues that while the narrative is correct, it is also incomplete. With its focus on the deficit countries, it neglects the role of Germany, by far the largest member state, and its contribution to the imbalances in the years preceding the Crisis. A narrative that does not account for the effects of the German wage moderation is incomplete.
Relevant Posts
- Janssen, Ronald, (2015), “The German Minimum Wage Is Not A Job Killer”, Social Europe Journal, 9 September
- Hancké, Β. (2014) “German austerity is not only damaging the Eurozone, but is also starving the country of its own much needed investment”, LSE EUROPP, 03 November.