In the coming weeks, the German Federal Government will introduce a bill in the Bundestag for a training levy for companies that fail to provide sufficient training places. Dieter Philipp, Association of German Crafts, and Michael Knipper, Association of the German Construction Industry, warn against such a levy. Prof. Dorothea Alewell, Jena University, and Prof. Bernhard Nagel and Roman Jaich, Kassel University, propose alternative solutions. Prof. Gerhard Bosch, Institute of Labour and Technology in North-Rhine Westphalia, proposes orienting legislation on that of the neighbouring European states.
Ludger Wößmann
The number of the training places offered by companies in Germany has clearly fallen behind demand in the past two years. This has led in recent months to demands for a training levy and to corresponding draft legislation by the SPD delegation in the Bundestag. Such demands are politically attractive. but it is often overlooked that there are reasons for offering fewer training places. In this article the possible underlying causes for the shortage of training places are analysed. These presumably lie in the concrete worsening of the cost-benefit relationship of training facilities for the companies and in the generally poor prospects for the economy. Both can only be changed by an improvement in the general conditions for a “knowledge society”; a training levy would only worsen the situation.
Rüdiger Parsche, Thomas Hanfstingl and Korbinian Leitner
The drifting apart of implementation and financing responsibilities in the organisational structure of some regional social welfare providers in Germany creates little incentive for an economical use of funds. In this article a structural reform is proposed that is based on the connexity principle and that can lead to considerable gains in efficiency.
Gerhard Illing
Since the stock market collapse at the beginning of 2000, the Fed has attempted to stabilise the American economy by providing it with massive liquidity. A major motive was the fear that the American economy could fall into a liquidity trap. Motivated by the conviction that the best strategy is taking timely counter measures, the Fed pursued an aggressive policy of repeated interest rate reductions. The money market interest rate sank to a current 1%, the lowest level in almost 50 years. In the meantime, more and more voices are warning that an over-provision of liquidity by the Fed contributes to an over-valuation of stock-market and real-estate prices. The low interest rates encourage excessive indebtedness and bear the danger that structural imbalances could build up that in future could result in a higher vulnerability to crisis of the American economy. Prof. Gerhard Illing, Munich University, shows in this article that the greatly increased indebtedness of the private sector makes American households more susceptible to fluctuations in interest rates, incomes and real estate prices. It cannot be ruled out that the Fed, instead of facing a liquidity trap, now stands before the reverse problem, an interest rate trap – the danger that faced with growing indebtedness a rise in interest rates could cause seriously negative effects on consumption, which means that the scope for monetary policy will be strongly limited in future.
Volker Rußig
Last year the construction volume in Europe is thought to have declined slightly (by about minus 0.2%). In their updated forecast the institutes in the Euroconstruct group expect only a very hesitant recovery in 19 western and central-eastern European countries: 1% for 2004 and about 1½% for 2005. The hopes for better times for construction focus on 2006, but even then the growth in construction will only be 2½%, which will fall behind the expected increase in GDP.
Horst Penzkofer
According to the results of the latest Ifo Innovation Survey, the share of innovators in German manufacturing increased in 2003 by two percentage points to 55%. It is still below the heights reached in the 1990s of ca. 60%.
Christian Hott and André Kunkel
The Ifo Business Survey also contains an employment indicator, which displays a very high correlation with actual employment trends in manufacturing, construction, commerce and for trade and industry as a whole. The indicator is very well suited for short-term forecasting of employment changes in trade and industry.
Oscar-Erich Kuntze
In 2003 real GDP is likely to have expanded by ¾% in Austria. The unemployment rate increased to 4½% and consumer prices by 1.3%. In 2004 real GDP will increase by 1¾%. The unemployment rate will continue to average 4½%, and consumer prices will be around 1¼% above the level of the previous year. In 2005 the unemployment rate should fall to 4¼%, and prices will increase by around 1½%.
For the OECD countries, on average, the debt rate has increased almost continuously since the beginning of the 1990s and will be clearly above 80% in 2005. This exceeds the value of 1991 by almost 30%. Also in Germany the indebtedness rate has increased since 1991 almost continuously and will be at 68% of GDP in 2005.
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