Home > Uncategorized > Germany: a triple dip?

Germany: a triple dip?

The German ‘Statistisches Bundesamt’ has published new, revised data on German economic growth. These data clearly show a slightly less rosy picture (in fact: a more gloomy picture) than previous data. Germany unequivocally  experienced the feared  ‘double dip’ in 2012/2013 – and we can’t even exclude a triple dip (a dip being defined as two subsequent quarters showing a decline of production). This despite record low interest rates! Which of course means that  Schauble and Merkel are wrong: contractionary policies are not expansionary, they are, as they are intended to be, contractionary (why is this for many people so difficult to understand…). Even when domestic interest rates are low.


I do not really expect a double dip: extra-Eurozone orders for manufacturing showed an extra-ordinary increase of +10% (mainly investment goods which, considering the size of the German economy, is HUGE). This increase even compensated the recent dismal development of domestic orders. But a little historical perspective is in order: total orders are still way lower than in 2007… Fortunately, the labour market is still doing reasonably well, the number of jobs increases with about 0,8% a year (which is to an extent caused by people working ever fewer hours, on average – if that’s voluntary that’s a good thing). We can’t however be sure that foreign, extra EU orders will keep compensating rapidly declining German retail sales. German domestic demand still seems to be sub par. Domestic demand has to revive and the number of jobs will have to grow with at least 2% a year. Raise those wages (with an additional 1% for a number of years), cut those taxes.

By the way. Last year, German government wealth declined more than a little – because, well, mainly something with banks.

  1. Garrett Connelly
    September 5, 2014 at 11:57 am

    The trick is degrowth of both population and economic intensity while maintaining geometrically increasing quality of life. Could it be that somebody in Germany knows something that 99,99% of economists are so far either afraid to look at or incapable of imagining due to a stultifying education?

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