1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Germany's Growth Potential, Structural Reforms and Global Imbalances

The potential growth rate of the economy has been low for a long time and the crisis has had a further adverse impact. The meagre growth performance mainly reflects low growth in a number of services sectors; most manufacturing sectors, by contrast, expanded at a rapid pace in the years preceding the recent crisis, on the back of robust foreign demand. The challenge is to consolidate the past success of the export sector and to broaden it to the whole economy by making the policy framework more conducive to innovation and structural change. Specifically, product market regulation needs to be eased to prevent it from sheltering uncompetitive industries; the framework conditions for innovation need to be improved; the education system needs to be reformed further to supply a sufficiently large pool of highly qualified labour; and immigration policy needs to become more favourable to the immigration of high-skilled. Strengthening Germany’s attractiveness as a location for investment would contribute to a higher trend growth rate through lifting barriers to higher growth, which are particular binding in the non-traded goods sector. This would reduce Germany’s current account surplus and make a contribution to reduce global imbalances. This paper relates to the 2010 OECD Economic Survey of Germany (www.oecd.org/eco/surveys/germany).

English

Keywords: innovation, education, potential growth, global imbalances, Germany, structural reforms, migration, product market regulation
JEL: D24: Microeconomics / Production and Organizations / Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity; F16: International Economics / Trade / Trade and Labor Market Interactions; N3: Economic History / Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy; K2: Law and Economics / Regulation and Business Law
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error