While the global economy has overcome many of the effects of the financial crisis, slow growth, job losses in traditional sectors, and increasing inequality are testing the ability of governments in advanced economies like the United States and Germany to provide broad-based prosperity. A high-standard, rules-based international trading system and well-regulated financial markets will continue to be important drivers of economic growth and a focus of attention for governments and business alike.
In this Transatlantic Perspectives essay, DAAD/AICGS Fellow Katharina Gnath discusses the G20’s compromise on a large-scale reform of the IMF, including the deal that transfers two of the eight European Executive Board seats to emerging market countries. Over the coming months, Europe will have to make some tough choices on the implementation of the deal, Ms. Gnath writes, and she argues that European member states should use this opportunity to improve the EU’s international macroeconomic policy and relations with the IMF.
Two years after the financial and economic crisis began in the United States and shortly thereafter spread to Europe and Germany, the subsequent economic downturn continues to cause problems around the globe. In Issue Brief 38, “Recovering From an Economic Hangover: Lessons and Prescriptions for Transatlantic Cooperation,” AICGS Research Associate Kirsten Verclas analyzes the impact of the economic crisis on Germany, the EU, and the United States and offers policy recommendations for promoting greater cooperation in the future.
Globalization has facilitated the spread of investments and manufacturing by transnational corporations (TNCs), opening new opportunities, but also posing new challenges to their business models and highlighting the need for a restructuring of employment and production, writes DAAD/AICGS Fellow Dr. Michael Fichter. Dr. Fichter focuses on the role of labor relations in the operations and policies of German TNCs in the United States and examines if there is any convergence of labor relations policies across the Atlantic.
DAAD/AICGS Fellow Dr. Stormy-Annika Mildner examines the differing German and U.S. proposals for an IMF-regulated ‘Financial Crisis Responsibility Fee’ and argues that their implementation is anything but certain. Dr. Mildner writes that the proposals differ with regard to the institutions subjected to the fee, the determinants of the fee (risk, income, and bonuses), the goals of the levy, as well as the appropriate use of the fee revenues, but states that strong transatlantic cooperation in the early stages can result in a more coordinated and effective implementation.
The notion of Deutschland AG refers to the interconnectedness of corporate ownership and control, particularly the relationships between banks and industry, which enabled the most powerful bankers and company managers to influence corporate decision-making throughout the economy…
Dr. Sebastian Dullien, Senior Non-resident Fellow and professor at the Hochschule für Technik und Wirtschaft Berlin, argues that Germany has been one of the main causes for global imbalances and has not been very constructive in global economic cooperation. Dr. Dullien writes that the world should continue to expect this sort of behavior from the world’s third-largest economy, no matter who wins the upcoming election, as the likely coalition possibilities will not change the macroeconomic debates.
In an essay titled “Keynes in Lederhosen: Assessing the German Response to the Financial Crisis,” Senior Non-Resident Fellow Dr. Stephen Silvia, professor of International Economic Relations at American University, examines the purported differences in economic stimulus policy between Germany and the United States. Dr. Silvia argues that Germany’s response is in line with it’s status as export champion, and that outside analysts should not be so quick to criticize Germany’s actions.
As the global financial crisis has expanded, there is considerable confusion in Germany about how to cope with the crisis and fall-out in the real economy, writes Prof. Dr. Paul J.J. Welfens, president of the European Institute of International Economic Relations (EIIW) and a former AICGS Fellow. Dr. Welfens proposes five specific ‘institutional innovations’ that would help in ending the chaos and inefficiencies in the banking systems, and argues for the introduction of a new tax regime designed to encourage bankers to have a long term time horizon in decision-making.
The global credit crunch has caused some to wonder whether or not the U.S. will be able to fulfill its account obligations to the rest of the world. However, the U.S. continues to have positive investment income. DAAD/AICGS Fellow Ute Volz discusses how this is possible and looks at the international investment positions (IIP) of the U.S. and Germany, focusing on the apparent ability of the United States to generate income out of a debtor position and why Germany is currently unable to do better with its IIP strategies.
Financial institutions in Europe and the U.S. are currently facing one of the most difficult periods in decades. In Issue Brief 28, Deutsche Bank/AICGS Fellow Jan Schildbach examines the fundamentals of banking markets on both sides of the Atlantic, looking at the role of globalization in determining success and failure as well as possible future trends in an era of increasing regulation.