The German labor market during the Great Recession: Shocks and institutions

Britta Gehrke, Wolfgang Lechthaler and Christian Merkl

Economic Modelling, 2019, vol. 78, issue C, 192-208

Abstract: This paper analyzes Germany's unusual labor market experience during the Great Recession. We estimate a general equilibrium model with a detailed labor market block for post-unification Germany. This allows us to disentangle the role of institutions (short-time work, government spending rules) and shocks (aggregate, labor market, and policy shocks) and to perform counterfactual exercises. We identify positive labor market performance shocks (likely caused by labor market reforms) as the key driver for the “German labor market miracle” during the Great Recession.

Keywords: Great Recession; Search and matching; DSGE; Short-time work; Fiscal policy; Business cycles; Germany (search for similar items in EconPapers)
JEL-codes: E24 E32 E62 J08 J63 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Working Paper: The German Labor Market during the Great Recession: Shocks and Institutions (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:78:y:2019:i:c:p:192-208

DOI: 10.1016/j.econmod.2018.09.022

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