Documents Storm, Servaas 8 results

"Economists and the governments they advise have based their macroeconomic policies on the idea of a natural rate of unemployment. Government policy that pushes the rate below this point - about 6 per cent - is apt to trigger an accelerating rate of inflation that is hard to reverse, or so the argument goes. In this book, Storm and Naastepad make a strong case that this concept is flawed: that a stable non-accelerating inflation rate of unemployment (NAIRU), independent of macroeconomic policy, does not exist. Consequently, government decisions based on the NAIRU are not only misguided but have huge and avoidable social costs, namely, high unemployment and sustained inequality. Skillfully merging theoretical and empirical analysis, Storm and Naastepad show how the NAIRU's neglect of labor's impact on technological change and productivity growth eclipses the many positive contributions that labor and its regulation make to economic performance. When these positive effects are taken into account, the authors contend, a more humane policy becomes feasible, one that would enhance productivity and technological progress while maintaining profits, thus creating conditions for low unemployment and wider equality."

"The electric vehicle (EV) transition portends wrenching change in Germany's export-dependent economy, with potentially severe job losses in core occupations in the automotive industry and a drastic restructuring of employment in and outside automotive supply chains. The EV transition is made even more challenging by the growing competition from Chinese (EV) producers, both in China and in the EU, and by de-globalization and renewed protectionism. The shift to EV production and the associated transformation and digitalisation of the car industry are raising existential questions and fears concerning the sustainability of Germany's macroeconomic ‘model' and the associated systems of social protection and industrial relations. Can the German economy, largely focused on mechanical engineering built around cars, reinvent itself for an increasingly digitalised, electrified and geopolitically fragmented world? This paper, Part One of a larger economic analysis of Germany's EV transition, identifies the macroeconomic constraints that will shape the EV transition in Germany's automotive industry in the next decades. Our focus is on the fiscal and monetary policy space, industrial policy, and industrial relations and social policies. We argue that the older German model of economic growth, based on a set of mutually reinforcing ‘beneficial constraints' (imposed by policies and institutions), no longer exists. Current macroeconomic policies do not support, but instead undermine, the EV transition and associated industrial transformation. German policy-making needs a fundamental reorientation toward creating space for public funding to stimulate domestic demand, provide adequate social protection, enable job mobility, build modern digital infrastructure, and deploy new technologies that are needed for the EV and larger green transition. In a separate paper (Part Two of our analysis), we examine the impacts of the EV transition on jobs, workers, industrial relations and firms in the German automotive industry."

"Owing to its strong dependence on exports, Germany was among the economies hit hardest by the financial crisis. But unlike almost all other countries, Germany emerged from the crisis quickly and stronger than before. What lies behind this success story, if at all it is one? The commonplace – neoliberal – answer is that Germany's success is the hard-won reward for strict economic management, combining fiscal conservatism and structural reforms of welfare and the labour market. The latter, by reducing labour costs, fostered competitiveness, boosted growth, and increased employment. “Progressive” economists arguing that Germany beggared its Eurozone neighbours by squeezing workers' wages, share a similar view. However, this particular explanation of Germany's resilience is wrong and unhelpful. Germany's export success cannot be explained in terms of its (labour) cost competitiveness, but is caused by strong non-price competitiveness. This, in turn, is due – much more than is normally recognized – by the remaining distinctly non-neoliberal dimensions of Germany's economic model (including a Keynesian crisis response). German and European policymakers preaching austerity and structural labour-market changes as the model for other Eurozone countries, misunderstand Germany's rebound from crisis, with serious costs to Eurozone populations."

"The dominant view, both on the mainstream right and on the left, holds that the Eurozone crisis is a crisis of labour-cost competitiveness—with trade imbalances (and hence foreign indebtedness) being driven by divergences in relative unit labour costs (RULCs) between surplus and deficit countries. To re-balance Eurozone growth, the mainstream solution is a deflationary policy of ‘internal devaluation' (i.e. cutting the wage share by as much as 30%) in the deficit countries. The ‘progressive' view holds that the surplus countries should adjust by raising their wage shares. We argue that both sides of this debate are wrong and unhelpful. Europe's trade imbalances are determined by domestic and world demand—whilst RULC divergences play only a negligible role. Eurozone growth can only be revived when Eurozone demand growth is restored, not by lowering wages here and/or raising them there. The current deflationary adjustment forced on the wage-led economies of Greece, Italy, Portugal and Spain is self-destructive: it is a ‘confidence killer', not only deepening the free fall of southern European incomes but also damaging their productive base and productivity growth. The outlook is depressing—further increases in already high unemployment rates, inequality measures and poverty rates inconceivable in prosperous Europe just a few years ago—and arguably dystopian."

"Deregulierung von Arbeitsmärkten und Lohnzurückhaltung haben signifikant niedrigere Wachstumsraten der Arbeitsproduktivität zur Folge. Dieser Beitrag diskutiert theoretische Argumente, warum "starre" Arbeitsmärkte für Innovationen nützlich sein können. Empirische Studien fundieren diese Argumente. Das Argument, dass größere Fluktuationen im Personalbestand schädlich sind für Innovationen und Lernprozesse, gilt vor allem für Betriebe mit einem "routinemäßigen" Innovationsmodell. Diese Betriebe sind stark abhängig von historisch akkumulierter Kenntnis, wovon viel personengebunden und schlecht dokumentiert ist ("tacit knowledge"). "Garage Business"-Betriebe wie etwa in Sillicon Valley brauchen mehr allgemein verfügbare Kenntnisse und haben damit viel weniger Probleme mit häufigerem Personalwechsel. Es ist interessant festzustellen, dass sich das Wachstum des Bruttoinlandsprodukts zwischen angelsächsischen Ländern (mit flexiblen Arbeitsmärkten) und korporatistischen Ländern (mit relativ rigiden Arbeitsmärkten) nur geringfügig unterscheidet. Außerdem gibt es Anlass, die Behauptung zu bezweifeln, dass "flexible" Länder niedrigere Arbeitslosenzahlen hätten."

"All IPCC (2018) pathways to restrict future global warming to 1.5 degrees C (and well below an already dangerous 2 degrees C) involve radical cuts in global carbon emissions. Such de-carbonization, while being technically feasible, may impose a `limit` or `planetary boundary` to growth, depending on whether or not human society can decouple economic growth from carbon emissions. Decoupling is regarded viable in global and national policy discourses on the Paris Agreement and claimed to be already happening in real time: witness the recent declines in territorial CO2 emissions in a group of more than 20 economies. However, some scholars argue that radical de-carbonization will not be possible while increasing the size of the economy. This paper contributes to this debate as well as to the larger literature on climate change and sustainability. First, we develop a prognosis of climate-constrained global growth for 2014-2050 using the Kaya sum rule. Second, we use the Carbon-Kuznets-Curve (CKC) framework to empirically assess the effect of economic growth on CO2 emissions using measures of both territorial (production-based) emissions and consumption-based (trade- adjusted) emissions. We run panel data regressions using OECD ICIO CO2 emissions data for 61 countries during 1995-2011; to check the robustness of our findings we construct and use panel samples sourced from alternative databases (Eora; Exio; and WIOD). Even if we find evidence suggesting a decoupling of production-based CO2 emissions and growth, consumption-based CO2 emissions are monotonically increasing with per capita GDP (within our sample). We draw out the implications of these findings for climate policy and binding emission reduction obligations."