Germany: Selected Issues
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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:
Employment Expenditure Labor Labor force participation Real exchange rates Unemployment Wages
English
Publication Date:
November 2, 2004
ISBN/ISSN:
9781451810455/1934-7685
Stock No:
1DEUEA0022004
Pages:
104
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