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Germany: Selected Issues

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  • International Monetary Fund

Abstract

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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  • International Monetary Fund, 2004. "Germany: Selected Issues," IMF Staff Country Reports 2004/340, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2004/340
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    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=17813
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    References listed on IDEAS

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    1. Engel, Charles, 2000. "Long-run PPP may not hold after all," Journal of International Economics, Elsevier, vol. 51(2), pages 243-273, August.
    2. Charles Engel, 1999. "Accounting for U.S. Real Exchange Rate Changes," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 507-538, June.
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    7. Lothian, James R & Taylor, Mark P, 1996. "Real Exchange Rate Behavior: The Recent Float from the Perspective of the Past Two Centuries," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 488-509, June.
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    Cited by:

    1. José Ignacio García Pérez & Yolanda Rebollo Sanz, 2005. "A Structural Estimation to Evaluate the Wage Penalty after Unemployment in Europe," Economic Working Papers at Centro de Estudios Andaluces E2005/15, Centro de Estudios Andaluces.
    2. Mr. Hunter K Monroe, 2009. "Can the Eastern Caribbean Currency Union Afford to Grow Old?," IMF Working Papers 2009/038, International Monetary Fund.
    3. Mr. Ian Lienert, 2005. "Who Controls the Budget: The Legislature or the Executive?," IMF Working Papers 2005/115, International Monetary Fund.

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