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Finance-dominated capitalism in Germany – deep recession and quick recovery

Author

Listed:
  • Daniel Detzer

    (Berlin School of Economics and Law, Institute for International Political Economy)

  • Eckhard Hein

    (Berlin School of Economics and Law, Institute for International Political Economy)

Abstract

Germany’s recent export successes and the fast recovery from the 2007 -2009 crisis made it Europe’s “economic superstar” in public opinion. This paper interprets the German performance against the background of financialisation. After an examination of the pre-crisis demand and growth regime, the focus is on how financialisation has contributed to the German ‘export-led mercantilist’ regime. The paper focuses subsequently on the determinants of the German current account balance, to then interpret the development of Germany during the financial and economic crisis and the causes for the quick recovery in light of the previous analysis.

Suggested Citation

  • Daniel Detzer & Eckhard Hein, 2014. "Finance-dominated capitalism in Germany – deep recession and quick recovery," Working papers wpaper54, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    • Handle: RePEc:fes:wpaper:wpaper54
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    References listed on IDEAS

    as
    1. Eckhard Hein, 2002. "Monetary policy and wage bargaining in the EMU: restrictive ECB policies, high unemployment, nominal wage restraint and inflation above the target," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 55(222), pages 299-337.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Eckhard Hein & Daniel Detzer, 2015. "Finance-Dominated Capitalism and Income Distribution: A Kaleckian Perspective on the Case of Germany," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 1(2), pages 171-191, July.
    2. Hubert Gabrisch, 2015. "Net Capital Flows To And The Real Exchange Rate Of Western Balkan Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 60(205), pages 31-52, April – J.
    3. Hubert Gabrisch, 2017. "Explaining trade imbalances in the euro area: Liquidity preference and the role of finance," PSL Quarterly Review, Economia civile, vol. 70(281), pages 155-184.
    4. Feiner Solís, Sara, 2021. "The effectiveness and risks of loose monetary policy under financialisation," IPE Working Papers 159/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    5. Eckhard Hein, 2015. "Causes and Consequences of the Financial Crisis and the Implications for a More Resilient Financial and Economic System: Synthesis of FESSUD Work Package 3," Working papers wpaper128, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    6. Gabrisch, Hubert, 2015. "Cross-border finance, trade imbalances and competitiveness in the euro area," MPRA Paper 68518, University Library of Munich, Germany.
    7. Hein, Eckhard, 2016. "Causes and consequences of the financial crisis and the implications for a more resilient financial and economic system," IPE Working Papers 61/2016, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

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    More about this item

    Keywords

    current account imbalances; financialisation; financial and economic crisis; Germany; trade balance;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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