Journal article


East German unemployment: The myth of the irrelevant labor market


Publication Details
Author(s): Merkl C, Snower D
Publisher: ME Sharpe
Publication year: 2008
Volume: 31
Journal issue: 1
Pages range: 151-165
ISSN: 0160-3477
Language: English

Abstract

This paper indicates that East Germany's unemployment problem originates primarily in the labor market, caused by the fast wage adjustment after German reunification. We model the resulting labor market "traps" in a search and matching framework, show that they are difficult to overcome, and provide empirical evidence. We argue that under these circumstances, demandside policies are effective mainly when they increase the economy's overall productivity and thereby help overcome the labor market traps.



Focus Area of Individual Faculties


How to cite
APA: Merkl, C., & Snower, D. (2008). East German unemployment: The myth of the irrelevant labor market. Journal of Post Keynesian Economics, 31(1), 151-165. https://dx.doi.org/10.2753/PKE0160-3477310108

MLA: Merkl, Christian, and Dennis Snower. "East German unemployment: The myth of the irrelevant labor market." Journal of Post Keynesian Economics 31.1 (2008): 151-165.

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