The ‘German Model’ in Decline

Abstract

The phrase, a ‘German model’, is adopted in the title although the existence of such a model is highly doubtful. The German economic post-war success story can be understood as a result of economic policy in a peculiar internal and external market constellation, whatever model is stylised (see Hölscher 1994). This paper argues that the market constellations faded away, but economic policy remained as if nothing happened at all. The process of changing market constellations began in the early 1970s with the breakdown of the Bretton-Woods system of fixed exchange rates, continued with ‘eurosclerosis’ and stagnation in the 1980s, and found its preliminary last stage in the new constellation of a unified German economy. The obvious signal of the new constellation is the coincidence of a record export performance and mass unemployment, reaching figures comparable to the world economic crises of 1933.KeywordsEuropean Monetary UnionGerman EconomyFinancial TransferEconomic ExpertGerman ModelThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.