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[Excerpt] Since the onset of the global financial crisis in late 2008 there has been a boom in positive assessments of the German economy. Little wonder. Remarkably, Germany has managed to bring down unemployment to more than one percentage point below the precrisis level and to maintain a current account surplus equivalent to 5 percent of its gross domestic product. This is not the first time that Germany's stock has ridden high. German economic institutions received praise for the "economic miracle" of the late 1950s and early 1960s, the "model Germany" economy that weathered the oil shocks comparatively well during the 1970s, and the "export world champion" economy of the mid-1980s. At other times, however, academics and journalists have been bearish on Germany. High unemployment dogged the German economy for a quarter century, starting in the early 1980s. From the mid-1990s to the mid-2000s, Germany was generally dismissed as the economic "sick man" of Europe. These oscillating appraisals of the German economy raise two questions: Does the current positive assessment of German economic institutions reflect something real, or is it just another speculative bubble? And, what is it about German economic institutions that has drawn the attention of so many over the years? In this book I address these questions by examining a key pillar of the postwar German economy, namely, the industrial relations system.


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