- International Monetary Fund
- Published Date:
- January 1989
© 1989 International Monetary Fund
Library of Congress Cataloging-in-Publication Data
The Federal Republic of Germany : adjustment in a surplus country / by Leslie Lipschitz … [et al,].
p. cm. — (Occasional paper, ISSN 0251-6365 ; no. 64)
1. Germany (West) —Economic conditions—1974-2. Germany (West) — Economic policy—1974- 3. Economic forecasting—Germany (West) I. Lipschitz, Leslie. II. Series: Occasional paper (International Monetary Fund) ; no. 64.
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The following symbols have been used throughout this paper:
… to indicate that data are not available;
— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
– between years or months (e.g., 1984–85 or January-June) to indicate the years or months covered, including the beginning and ending years or months:
/ between years (e.g., 1985/86) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
This study reviews and analyzes economic developments and policies in the Federal Republic of Germany during the 1980s. It traces the dynamics of the cyclical upswing that began at the end of 1982 and describes the genesis of the two major imbalances in the German economy in the course of the 1980s: high unemployment and large external surpluses. A discussion of the economic policies adopted to deal with these imbalances forms the main body of the paper. The analysis of these policies highlights the constraints on adjustment for a country with external surpluses. The study then concludes with an illustrative exercise on the medium-term economic outlook for the German economy under alternative policy scenarios. The results of this exercise underline the importance of structural policy measures in dealing with the disequilibria in the German economy.
The study was inspired by the 1988 Article IV consultation discussions of the Fund staff with the German authorities (concluded in July of that year). The opinions expressed, however, are those of the authors alone and should not be construed as reflecting the views of the German authorities. Executive Directors of the Fund, or other staff members. The authors also bear sole responsibility for any factual errors. The inevitable time lag between preparation and publication unfortunately means that some of the data will be out of date by the time of publication—the statistical material contained in Appendix I reflects information available in the summer of 1988. Similarly, information that became available during the autumn of 1988 could only be partially incorporated into the text of the paper. Recent revisions of the data and estimates, however, do not materially alter the broad conclusions of the paper.
The authors are indebted to Manuel Guitián for his support in the preparation of the study and many helpful suggestions and comments, to Aurel Schubert for helpful background work on structural issues in Germany, to Behrouz Guerami for research assistance, to Juanita Roushdy of the External Relations Department for editorial assistance, and to Hilda Newman, Valerie Pabst, and Ann Phillips for secretarial support.