Germany: Selected Issues

Publication Date:

November 2, 2004

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

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.

Series:

Country Report No. 2004/340

Subject:

English

Publication Date:

November 2, 2004

ISBN/ISSN:

9781451810455/1934-7685

Stock No:

1DEUEA0022004

Pages:

104

Please address any questions about this title to publications@imf.org