Tuesday, September 28, 2010
German Consumer Confidence on the Rebound
German consumer confidence is currently the highest it has been in over three years. While this might seem odd considering the current economic climate, economists are tracing it back to job optimism and the fact that unemployment is at 7.6%, matching the level it was at prior to the drastic downturn. This, some would argue, is where Germany's economic system comes into play. With its emphasis on stability, despite the fact that growth is limited in the economic booms, it rebounds during recessions faster than the rest of the developed world. Germany is effectively back on track with where it was economically before all of this began. Perhaps the rest of us can learn a few things from Mitbestimmung
Subscribe to:
Post Comments (Atom)
3 comments:
Yes but we have to take into account what Germany produces and exports and also what jobs they were helping maintain. Most of the increase in unemployment in the US is loss of jobs in manufacturing so a government subsidy that would allow firms to reduce production but still maintain workers is not feasible. There is already cheaper and more efficient production happening in china. I am more of a fan of Sweden and Slavic nations that help with job matching and training.
It's extremely interesting to me, consider the fact that Germany's growth owed a lot to a surge in exports, especially to China. On the contrary, the US Senate just blocked the legislation proposal to impose tariffs on trades with China in order to save jobs for Americans.
This might be one of the reason:
"But even at the height of the crisis, a government-subsidized short-time work plan that allowed employers to reduce production without cutting employees kept the jobless rate in check"
Not only Germany but the fact the most European countries experienced growth (Germany came 2nd behind Lithuania) and fall in unemployment rate this past quarter begs a question of the efficiency of the U.S model. Is the European model better espcially in bad times like this?
I don't think the German model is one of perfection. During the recession it seems to be a good model to follow but like we discusses in class, there is slow growth in times of prosperity. Do you want to be lagging behind for a long time and then suddenly catching up later?
Post a Comment