Absent such indexation, it is more protective for workers to focus on inflation. Indexation comes when you have strong unions, which is not quite what we have now.
It's easy to blame the Bundesbank for the 90s, but why don't you blame Kohl's decision to take in the Ost-mark at parity, the underlying cause of the Bundesbank's toughness, and the reason the whole East German industry became totally unable to be price competitive overnight - and indeed disappeared extremely quickly. That was a political choice to buy off unification by paying Eastern consumers a one off bonus - while destroying their jobs. In the long run, we're all dead. John Maynard Keynes
But this doesn't help explain why workers show a distinct preference for employment protection over protection of inflation. How to explain that?
Your neo-lib bogeymen haven't broken the indexation either, not even close and they can't right now either. But give Europe 20% unemployment again, and we'll see. That's what your policies will lead to.
Understood on the ost-mark conversion, that was a disaster. Which French President went along with that whole programme and used essentially political graft to get re-elected via illegal campaign financing? Fai de bèn a Bertrand, te lou rendra en cagant
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
