Since the 1960s, Germany has established itself as European manufacturing centre, and its export of goods made in Germany has become a pillar of its economic post-war success. In recent years, many German firms have further deepened their international involvements with links to global value...

The article advances the hypothesis that Germany is unable to increase its gains from trade dispite increasing trading volumes. High and rigid German wages largely result from the minimum wage constraint imposed by a welfare state that offers generous replacement incomes. Confronted by low-wage...

Germany exhibits a strong reduction in domestic manufacturing production depth (bazaar effect). I argue that this reflects an unbundling of comparative advantage. Using a model where Ricardian plus Heckscher-Ohlin-type comparative advantage relates to fragments of production, I compare a trading...