tag:blogger.com,1999:blog-4900303239154048192.post3638744561959705841..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Sinnlos, Part IIUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-4900303239154048192.post-64381364285325784752013-03-11T17:30:01.803-04:002013-03-11T17:30:01.803-04:00"In fact, German wage repression, as many hav..."In fact, German wage repression, as many have noted, was an important part of the story over the course of the 00's. Because of the Hartz reforms, and cautious wage bargaining in general, German wages remained essentially flat for nearly a decade." <br /><br />I don't understand this statement. According to the BLS international labor comparisons, direct pay and benefits for German manufacturing workers in U.S. dollars increased 89% while Euro area inflation was roughly 25%. That's a real increase of about 50%. While it's true German pay did not go up quite as fast as it did for its neighbors (who saw increases between 100-110%), wage and directly-paid benefit growth in Germany was far higher than in the UK and the US, two of GermanKISSWebhttps://www.blogger.com/profile/13917779875188133814noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-31339061553783500502013-03-11T14:57:17.045-04:002013-03-11T14:57:17.045-04:00"...you can imagine a third possibility, unme..."...you can imagine a third possibility, unmentioned by Sinn and Valentinyi: Germany could reflate." <br /><br />Actually, they do mention this, in about the middle of the piece after the subhead: "Rebalancing in the Eurozone"<br /><br />"Internal devaluation through rising prices in the core does not lead to recession in the periphery. The core, however, is required to bear the cost of higher inflation, which may also undermine the stability of the monetary union."<br /><br />And that's it. I assume that 'may also undermine the stability of the Eurozone' is code for 'this is something Germans would not tolerate', so it looks like the peripherals are just going to have to suck it up and endure a decade-long depression. It may be wrong to associate 'surplus' with 'virtue', but you wouldn't go astray associating it with 'power'.<br />Dave Lhttps://www.blogger.com/profile/04361483842937914464noreply@blogger.com