German labor market and fiscal reforms 1999 to 2008: Can they be blamed for intra-Euro Area imbalances?

Niklas Gadatsch, Nikolai Stähler and Benjamin Weigert

No 05/2014, Working Papers from German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung

Abstract: In this paper,we assess the impact ofmajor German structural reforms from1999 to 2008 on key macroeconomic variables within a two-country monetary union DSGE model. Bymany, these reforms, especially the Hartz reforms on the labormarket, are considered to be the root of thereafter observed imbalances in the Euro Area. We find that, in terms of German GDP, consumption, investment and (un)employment, the reforms were a clear success albeit the impact on the German trade balance and the current account was onlyminor. Most importantly, the rest of the Euro Area benefited frompositive spillover effects. Hence, our analysis suggests that the reforms cannot be held responsible for the currently observed macroeconomic imbalances within the Euro Area.

Keywords: Fiscal Policy; Labor Market Reforms; DSGE modeling; Macroeconomics (search for similar items in EconPapers)
JEL-codes: E32 E62 H2 J6 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-dge, nep-eec, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/103832/1/804389837.pdf (application/pdf)

Related works:
Journal Article: German labor market and fiscal reforms 1999–2008: Can they be blamed for intra-euro area imbalances? (2016)
Working Paper: German labor market and fiscal reforms 1999 to 2008: Can they be blamed for intra-euro area imbalances? (2015)
Working Paper: German Labor Market and Fiscal Reforms 1999 to 2008: Can They be Blamed for Intra-Euro Area Imbalances? (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:svrwwp:052014

Access Statistics for this paper

More papers in Working Papers from German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().