Concerted Action - Preventing the Wage-Price Spiral?
Inflation in Germany is at record levels and warnings of an impending wage-price spiral are growing louder. Now Chancellor Olaf Scholz has announced that he will bring employers and unions together in a “Concerted Action” to discuss a course of action to tackle inflation. The Grand Coalition took a similar approach at the end of the 1960s to find a way out of the economic crisis at the time – with mixed success. Does an alliance between financial and wage policy promise more success this time? Can the current burdens be reduced in this way without Germany sliding into recession? And: what role does monetary policy play in the coordination process?
We discussed this in our New Economy Short Cut “Concerted Action – Preventing the Wage-Price Spiral?” with IW Director Michael Hüther and Anke Hassel (co-director of the Jacques Delors Centre at the Hertie School).