We argue that wages have increased so far ahead of labor productivity in east Germany as to produce a problem that will continue to hound German policy-makers for the next two decades.

The crucial difference between the German and the Anglo-American system of corporate control is not the influence of the banks, but the different role played by capital markets and company boards. Banks in Germany have begun to reduce their role in corporate governance, particularly with respect...

A low-credibility currency such as the Mexican peso or the Polish zloty that is overshadowed by a hard, international currency in a neighboring country cannot remain competitive in an integrating region. The devices used to protect the banking and financial business conducted in such currencies...

This paper examines investment behavior at the aggregate level, for a panel of 24 OECD countries over the period 1964-92. Defining two groups of countries as having German-type or Anglo-Saxon type financial systems, we estimate cross section time series panel relationships for each group of...

EMU is expected to foster the emergence of a European capital market and this is arguably one of the most significant gains of monetary union. On the European continent at least, capital markets are still underdeveloped and financial markets are, therefore, bank-dominated. The rise of a large...

This paper presents evidence supporting the theory that informational and incentive problems in the capital markets affect firm investment. This hypothesis is tested by estimating investment equations for two groups of German firms.