This paper examines two ways in which competition works in modern capitalist economies to improve productivity. The first is through incentives: encouraging improvements in technology, organisation and effort on the part of existing establishments and firms. The second is through selection:...

The German economy is recovering hesitantly from the sharp post-unification boom and recession. Two features of recent West German performance are novel: there has been an unprecedented loss of jobs in industry, and manufacturing profitability has been pushed to its lowest level ever and is now...