The Importance of Morality in Germany's Wages

Michael Kofman: In a globalized world it is very difficult to improve productivity. He says much of the benefits of the greater demand bleed abroad. So what Germany did was effectively lower wages through the heart's reforms, he says. But since peripheral Europe entered the Euro with much higher inflation and it continued, that meant that capital had a negative real cost in peripheral Europe and a very high positive real cost in Germany.