Merkl C, Snower D (2008)
Publication Language: English
Publication Status: Published
Publication Type: Journal article
Publication year: 2008
Publisher: ME Sharpe
Book Volume: 31
Pages Range: 151-165
Journal Issue: 1
DOI: 10.2753/PKE0160-3477310108
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.
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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