Owing to its strong dependence on exports, Germany was among the economies hit hardest by the financial crisis. But unlike almost all other countries, Germany emerged from the crisis quickly and stronger than before. What lies behind this success story, if at all it is one? The commonplace -...

This paper argues that the case for real wage growth restraint, and the consequent restoration of profitability, which the mainstream consensus regards as a necessary condition for sustained output and productivity growth, is based on weak foundations, because it neglects the negative impact of...