Cover IMF Staff Country Reports
Germany: Selected Issues
Author:
International Monetary Fund
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2004: Issue 340
Language:
English
Publication Date:
02 Nov 2004
DOI:
https://doi.org/10.5089/9781451810455.002
ISBN:
9781451810455
ISSN:
1934-7685
Pages:
104
Keywords:
ISCR; CR; growth rate; government; payroll burden; social security contribution rate; inflation differential; capital accumulation; equilibrium exchange rate; payroll cost; Unemployment; Labor force participation; Wages; Employment; Europe
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This Selected Issues paper on Germany reviews investment trends and business capital stock in Organization for Economic Co-operation and Development (OECD) countries. Sharp wage increases are found to boost capital formation in the short term as employers substitute capital for labor at a rate that adjusts to the higher relative price for labor. To limit the political economy biases to fiscal policy, the paper explores options to strengthen budgetary institutions, notably more transparency; stronger budgetary rules; and more room for Länder governments to mobilize revenue and tailor spending to local circumstances.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund
Volume 2004: Issue 340