Abstract
The present upswing of the West German economy has entered its fourth year (1986) and neither the GNP growth rate nor the inflation rate seem to show any alarming signs. The labour market is improving too, but rather slowly compared with previous cycles. The unemployment rate is persistently high. However, when seen from outside, in this respect the West German picture does not look very different from that of the rest of Europe (Blanchard et al., 1985, p. 5). Nevertheless, West German public authorities and most observers are much concerned. Of course, a formal explanation for this continuing labour market imbalance can easily be found in the growth of the economy which relatively to the average growth of productivity of 2.5% is still too small to raise employment substantially. Especially so since the labour force is expanding and the influx from the ‘Stille Reserve’ is high. Causes and cures for the unsatisfying labour market developments can be grouped along several axes. The most important one in Germany is the demand-supply line, with the supply-side view centred on the role of wages.
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Heilemann, U. (1988). Collective bargaining and macroeconomic performance: the case of West Germany. In: Motamen, H. (eds) Economic Modelling in the OECD Countries. International Studies In Economic Modelling. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-1213-7_23
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