Leading economists to look at US, German policies
Klaus Zimmermann and Catherine Mann are featured presenters at forum Oct. 20
Two leading authorities on German and US economic policies will examine the differing steps taken by the two countries to cope with the global economic crisis and address why Germany is celebrating another “Wirtschaftswunder” -- economic miracle -- while the US economy is still stagnating.
The Wednesday, Oct. 20, event features Klaus F. Zimmermann, Professor of Economics at Bonn University and Director of the Institute for the Study of Labor (IZA Bonn), and Catherine L. Mann, the Barbara and Richard M. Rosenberg Professor of Global Finance and director of the Rosenberg Institute of Global Finance at Brandeis’ International Business School.
The German economy is growing faster than the U.S. economy, and while Germany has a trade surplus, the U.S. has a trade deficit. Mann notes a stark contrast in the way the two countries have addressed the world-wide recession. “While we were pushing a stimulus, Germany was putting the brakes on stimulus programs,” she says.
The economic underpinnings of the two countries, says Mann, are fundamentally different. “Structures of the housing market and the financial markets in the U.S. have supported home ownership and the financial markets have supported a high percentage of people owning their own homes,” Mann says. “The rush to create home ownership has created mortgages that are not sustainable.”
In Germany, Mann contends, home ownership is much less important and financial markets are not as involved in financing home ownership.
The financial recovery, says Mann, is taking a long time. “Banks are not lending to the economy,” she says. “They choose not to lend because they are scared about lending at this point. Small businesses are then not in a position to grow and add jobs.”
Germany, by contrast, “has a banking system that is freer to spend and businesses are getting credit from the banking system and are freer to grow and add jobs.”
Wednesday's program will run from 12:10 to 1:30 p.m. in International lounge, Usdan. A light lunch will be provided.
This event is co-sponsored by the Center for German and European Studies, the Rosenberg Institute and the International and Global Studies Program.