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)| false Jaeger, A., L. Kodres, C. Kollau, S. Hubrichand E. Prasad, 1999, Germany—Selected Issues and Statistical Appendix, Chapter I: Institutional Change and Economic Performance: A Fifty-Year Perspective, IMF Staff Country Report No. 99/130 ( Washington: International Monetary Fund) pp. 8– 33.
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Prepared by Albert Jaeger.
Moreover, Germany’s labor productivity levels are likely to be underestimated (relative to the United States) owing to differences in the statistical treatment of investments in new information technologies. See Deutsche Bundesbank (2000, p. 8).
Preamble of the government’s coalition agreement (dated October 1998; own translation).
This interpretation of the interaction between shocks, labor market institutions, and financial policies in Germany draws on Chapter I (Institutional Change and Economic Performance: A Fifty-Year Perspective) in last year’s Selected Issues Paper on Germany, which also provides a number of references to articles and books that adopt similar interpretations of Germany’s postwar growth cycle history, specifically Paqué (2000) and vander Willigen (1995).
Labor market institutions are defined as the formal (legal) and informal rules that underpin bargaining on wages and other work conditions, the social insurance system, the social safety net, and active labor market policies. See Williamson (2000) for a survey of the “new institutional economics.”
Prasad (2000) presents evidence on the spreads between reservation wages (based on survey data compiled within the German Socio-Economic Panel (GSOEP)) and take-home pay offered by the market.
Calmfors and Skedinger (1995) discuss theoretical considerations and empirical evidence (for Sweden) that suggest that the effectiveness of active labor market policies may be quite limited.
The Alliance for Jobs is a social partner forum initiated by the government in 1998 to coordinate a comprehensive approach to improving labor market conditions; the Alliance comprises the government, employers’ associations, and the trade unions.
Chapter II provides a detailed analysis of the economic effects of wage moderation and the Dutch experience.
U.S. data suggest, however, that since 1995—the period most clearly associated with the “new economy” boom in the United States—wage inequality has ceased to worsen.
This agreement between labor unions and employers formalized an understanding to aim at wage moderation to stimulate employment. For more details on the overall Dutch experience, see Watson and others (1999).
In this context, however, a recent report by the Advisory Council to the Ministry of Economics and Technology (2000) argued that corporatist policy strategies entail significant costs in terms of conserving statusquo structures.