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Matt recently found himself in Berlin for a conference, which was a great opportunity to meet Marcel Fratzscher and record this episode.
Fratzscher is the president of the German Institute for Economic Research (Deutsches Institut für Wirtschaftsforschung, or DIW for short). His recent research has focused on the “dark side” of the Germany economy.
While Germany is often looked to as a role-model for others thanks to its low unemployment, strong welfare state, first-class export sector, and government budget surpluses, the country has deep problems with inequality, social mobility, and under-investment. Alphaville and the rest of the FT have written about some of these topics before (see the related links below for a flavour) but Fratzscher is the expert who has highlighted these issues most prominently in his home country.
A few highlights:
- The effective wealth tax rate on estates worth at least €10m is less than 1 per cent, because Germany has generous tax preferences for family businesses
- Germany is one of the only countries in the world where fewer young men are going to college than in the past
- The East-West economic divide is mostly gone but there is now a serious gap in prosperity between the northern and southern Länder — and the richer southern states don’t like paying for “lazy” northerners
- More Germans have a job than ever before but many of the extra jobs are low-pay and part-time
Hope you enjoy!
Related links:
The beautiful south: Germany’s new divide — The Economist
Germany: the hidden divide in Europe’s richest country — Financial Times
Cracks appear in Germany’s cash-starved infrastructure — Financial Times
The myth of the German jobs miracle — FT Alphaville
‘Verteilungskampf’, by Marcel Fratzscher — book review by Martin Sandbu
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