Divergence in labour force growth : should wages and prices grow faster in Germany?

Marczak, Martyna; Hellier, Joël; Beißinger, Thomas

Divergence in labour force growth : should wages and prices grow faster in Germany?

dc.contributor.author	Marczak, Martyna	de
dc.contributor.author	Hellier, Joël	de
dc.contributor.author	Beißinger, Thomas	de
dc.date.accessioned	2024-04-08T08:59:42Z
dc.date.available	2024-04-08T08:59:42Z
dc.date.created	2020-10-20
dc.date.issued	2020
dc.description.abstract	We develop a model which shows that wages, prices and real income should grow faster in countries with low increase in their labour force. If not, other countries experience growing unemployment and/or trade deficit. This result is applied to the case of Germany, which has displayed a significantly lower increase in its labour force than its trade partners, except in the moment of the reunification. By assuming that goods are differentiated according to their country of origin (Armington’s hypothesis), a low growth of the working population constrains the production of German goods, which entails an increase in their prices and in German wages. This mechanism is magnified by the low price elasticity of the demand for German goods.Hence,the German policy of wage moderation could severely constrain other countries’ policy options. The simulations of an extended model which encompasses offshoring to emerging countries and labour market imperfections suggest that (i) the impact of differences in labour force growth upon unemployment in Eurozone countries has been significant and (ii) the German demographic shock following unification could explain a large part of the 1995-2005 German economic turmoil.	en
dc.identifier.swb	1736051105
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/6545
dc.identifier.urn	urn:nbn:de:bsz:100-opus-18114
dc.language.iso	eng
dc.relation.ispartofseries	Hohenheim discussion papers in business, economics and social sciences; 2020,09
dc.rights.license	publ-mit-pod	en
dc.rights.license	publ-mit-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_mit_pod.php
dc.subject	Population growth	en
dc.subject	Labour force	en
dc.subject	Wages	en
dc.subject	Germany	en
dc.subject.ddc	330
dc.subject.gnd	Inflation	de
dc.subject.gnd	Lohn	de
dc.subject.gnd	Beschäftigungstheorie	de
dc.title	Divergence in labour force growth : should wages and prices grow faster in Germany?	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.faculty.number	3	de
local.institute.number	520	de
local.opus.number	1811
local.series.issueNumber	2020,09
local.series.title	Hohenheim discussion papers in business, economics and social sciences
local.university	Universität Hohenheim	de
local.university.faculty	Faculty of Business, Economics and Social Sciences	en
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.institute	Institute for Economics	en
local.university.institute	Institut für Volkswirtschaftslehre	de

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