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Essentially mature economies become dependent on export expansion for growth either if they are in the aftermath of a credit driven consumer boom (and hence deleveraging, weakening domestic demand) or their population median age rises above a certain point (yet to be adequately calibrated) meaning that the demand for consumer credit no longer expands as the balance between savers and borrowers shifts across cohorts and across the life cycle. Hence Germany's wage adjustment is not something exceptional, or even reversible, but forms part of a natural process to reinforce competitiveness in the export sector of a society with a large elderly population and hence generate GDP growth.
Further, is Hugh positing that no other Eurozone country is experiencing population ageing, and consequently the "natural process to reinforce competitiveness"? Only Germany?
I don't expect demographics to explain everything, but they have a strong influence, and more so when coupled with social institutions. At a minimum that's how I see the situation in Spain with regards to the regional differences.
res humą m'és alič
Taking the percentage of over-65s in the total population (Eurostat, 01/01/2011) as a proxy for ageing, the leading Eurozone countries are:
He posits that demography changes the balance between savers and borrowers, but doesn't explicate that this balance may be different in different places due to local culture and regulation. Further he doesn't account for the fact that in a Eurozone of free capital movement, savings and borrowings can and did have non-local effects...
(It's also bogus for a variety of other reasons, but that's the main one.)
If you only spend 20 minutes of the rest of your life on economics, go spend them here.
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