The income tax rate structure introduced in 2007 was changed in 2009. The income tax rates will be lowered in 2010, too. The effects on the wage income tax revenues and on the incentives to work are analyzed. It turns out that "bracket creep" will remain a problem in Germany.

In many countries, fiscal policy became strongly expansionary in order to fight the recession. Structural budget deficits increased sharply and might remain high after the end of the recession. This would raise real interest rates and would impair economic growth. Some measures to reduce the...

Following the expenditure cuts decided upon by the German federal government in spring 1996, the impact of fiscal policy on the business cycle is investigated. The impulse given by fiscal policy is measured by the change of the structural general government budget surplus/deficit. It turned out...

The paper compares the pay-as-you-go system and a capital funded system of old age insurance. The capital funded system has a higher rate of return. Pension income can be obtained at lower costs for the individual. This implies efficiency gains in terms of higher savings and reduced distortion...

In light of the ongoing discussion on the erosion of the tax base in Germany, the relation between value added tax (VAT) revenues and their macroeconomic underpinnings is investigated. Based on a highly disaggregated classification of private consumption and specific government expenditures it...

In the process of the German unification and especially after the formal unification in October 1990, Eastern Germany was supported by West Germany by a lot of measures. The main purposes were to improve the infrastructure, to stimulate private investment and to alleviate the adjustment process...