Peter Bofinger

Peter Bofinger ( born September 18, 1954 in Pforzheim ) is a German economist and professor of economics at the University of Würzburg. Since March 2004 he is member of the Advisory Council on the Assessment of economic development.

Life

Peter Bofinger studied from 1973 until the completion of a degree in economics at the University of Saarland in Saarbrücken. From 1978 to 1981 he was a research assistant on the staff of " economic experts ". He was Doctorate in 1984 with a thesis on " currency competition. A systematic presentation and critical appraisal of Friedrich August von Hayek's plans for a fundamental redesign of our monetary system. " From 1985 to 1990 he was a research assistant and from 1987 Bundesbank chief council in the economics department of the State Central Bank in Baden- Württemberg.

In 1990 he habilitated at the Law and Economics Faculty of the University of Saarbrücken. In the years 1990 and 1991 he represented the C3-Professor of Economics at the University of Kaiserslautern and 1991, the C4 professor of economic policy at the University of Konstanz. In 1991 and 1992 he was the representative of the C4 Department of Economics, Money and Economic Relations at the University of Würzburg, in August 1992, he became full professor. As of October 2003, he was First Vice President for one year at the University of Würzburg. In 2003, his textbook appeared basics of economics.

In March 2004 he was appointed on the recommendation of the unions in the Experts for the Assessment of the overall economic development, the so-called five farming practices.

Memberships

  • Member of the Scientific Advisory Board of the Austrian Institute for Economic Research
  • Society for Economic and Social Sciences ( Association for Social Policy), Committee on monetary theory and policy
  • Research Fellow of the Centre for Economic Policy Research, London
  • Board of Irving Fisher Society for Economic and Monetary Affairs, Würzburg
  • Member of the Scientific Advisory Board of the Business Service
  • Editorial Board: International Journal of Finance & Economics
  • Member of the Advisory Council on the Assessment of Overall Economic Development
  • Editorial board of the leaves for German and international politics (since May 2011)
  • Institute for New Economic Thinking ( INET )

Economic policy positions

Bofinger is a leading representative of a demand-oriented economic policy in Germany and represents this country so that a minority position. In interviews, books and statements - especially in the Experts - he emphasizes, neglected the demand side, in particular in Germany and become the symbiosis between supply and demand is not complied with. Most German economists were more likely to emphasize the supply side. Bofinger was thus also one of the few German economists who have spoken out against the core principles of the Agenda 2010 and the Hartz reforms, when he saw hereby enter a further weakening of domestic demand. In this context, he warned of the danger of deflation and their possible long-term effects, like from 1992 in Japan.

Bofinger argues that the state 's social systems work with a bank Germany too little about both direct and indirect taxes and instead to unilaterally wage labor costs, bringing the labor factor of production raises the price of disproportionate. It leads to the high tax burden on labor, especially back a portion of the particularly high unemployment of low -skilled workers in Germany. To solve the problem, he suggests structural reforms such as the introduction of a negative income tax and the reduction of non-wage labor costs, financed through higher taxes. Furthermore, he is in favor of limiting the non-wage labor costs in the healthcare system for the so-called capitation.

Bofinger is enemy of models of an unconditional basic income. He said in 2006, he did not think that one so that the affected people would do a favor. In addition, we have already such a similar basic income in unemployment benefits, which also would get every unemployed person, provided he is in need. His further point of criticism was that the model of an unconditional basic income and a large number of rich people received money which, like him, it never would have needed.

For the introduction of a nationwide minimum wage represents Bofinger a differentiated opinion. He suggests ( for Germany ) initially a height of 6 euros before that could be slowly adjusted upwards then, the effects on employment, following the example of the United Kingdom after each increase should be examined. Generally, he sees the problem of asymmetric information. Then the workers were particularly badly informed in the low -wage sector about how productive they are and would therefore assume that would be well below their productivity and jobs. This can be prevented only through collective agreements and, where minimum wages.

Wage policy

Bofinger advocates rewarding politically a productivity- oriented wage developments, consisting of the inflation target line of the Federal Reserve and the rise in labor productivity. The shared by many economists position, wage increases below productivity growth are employment-friendly and suitable to return the unemployment, he refuses. He states that while it is quite rational for the individual entrepreneur to reduce in an economic downturn or in a bad order situation wages in order to keep the profits stable. At the aggregate level, however, this would lead to a collapse in demand for goods because the disposable income of private households decreases. Crucial for investments is the order situation in the first place. With a low production capacity utilization would also best deal conditions (ie, low wages, low corporate taxes ) does not lead to a growth in investment, in particular the expansion. In addition, he refers to the propensity of households compared to the entrepreneur households. The former is considerably less than the savings rate of the company. Therefore go of wage increases below productivity growth a aggregate demand lowering effect, since the entrepreneur households consume the additional income is less.

Bofinger closes this reason the criticism of many economists as being too rigid, found at the collective labor contract in Germany not to. This would guarantee that it will not come in economic downturn to pay cuts across the board, which would destabilize the economic development even further.

Monetary and exchange rate policy

In monetary policy he criticized in his opinion to restrictive behavior of the ECB and its forerunner in Germany, the Bundesbank. He sees the primary orientation of the ECB on price stability, with the consequent neglect of promoting growth and employment as a failure. He praises the current expansionary policy than the U.S. Federal Reserve, on the part of the higher growth of the United States was due in the recent past. However, in an interview with the daily newspaper Die Welt in August 2007, he referred to the U.S. monetary policy in 2004 and 2005 as much too expansionary and interest rates as too low. This was a crucial mistake and had caused the financial crisis in 2007. "If the Fed from the outset a sounder policy made ​​such as the European Central Bank, could have been avoided some " so Bofinger.

In addition to a restrictive monetary policy, he criticized the monetary policy of the ECB, which is expressed in a negative attitude of the ECB to interventions in the foreign exchange market ( interventions have been implemented by the ECB only once ). In an interview with the mirror he held in November 2007 against the background of rapidly rising euro - dollar exchange rate, the opinion that the Western European countries took advantage of this opportunity to little use and thereby neglected national interest. A further rise in euro will trigger new debates about relocation after Bofingers view.

Fiscal policy

In fiscal policy, Bofinger has strongly called for a counter-cyclical fiscal policy. He criticizes the provisions in the European Economic and Monetary Union on the limitation of government borrowing to be too inflexible. The limits set by the Stability and Growth Pact - the borrowing limit in the amount of 3% and the debt ratio of 60 % of gross domestic product - are arbitrary because they are not selected according to scientific criteria, were derived from 1990 rather from the debt level of the EU countries. Although Bofinger speaks in the long term for limiting the public debt, as they will, inter alia, was also associated with negative redistribution effects. However, the EU Treaty do not allow the he advocated counter-cyclical fiscal policy, which expresses itself in a reasonable increase in the structural deficit in economic downturns. This would require, if the rules of the monetary union is to be maintained, regular budget surpluses at a considerable height can be achieved.

As a model for the success of counter-cyclical fiscal policy, he leads among other things to the United States and the United Kingdom. This would have the structural deficit widened for example, in the years 2001 to 2003, following the collapse of the dotcom bubble in a concerted action massively and simultaneously lowered the federal funds rate drastically, which led to a sustained high economic growth. He emphasizes the importance of coordination of monetary and fiscal policies, which are unlikely to act against each other ( as was often the case in continental Europe) in this context.

Tax and charges

The debate on reducing the tax and charges, he criticizes that the success of a low state quota was not empirically verifiable. In Europe it is called countries with historically high government spending ratio (Sweden, Denmark, Finland, France), who have a sometimes very dynamic economic development, and countries with lower government spending ratio with a contrary finding ( such as Germany, Switzerland and Japan). Public expenditure in education and research, and infrastructure, which are crucial to the long -term economic prosperity would be without a high state quota can not be financed. Nevertheless, he argues for more funding of social systems on taxes while reducing social security (see above).

Works (selection)

  • Principles of Economics: An Introduction to the Science of markets, 2nd, updated edition. Pearson Education, Inc., Munich, 2006. ISBN 3-8273-7222-4
  • Monetary and fiscal policy interaction in the Euro area with different assumptions on the Phillips curve. Center for Globalization and Europeanization of the Economy. Göttingen 2004.
  • We are better than we think - prosperity for all. Pearson Education, Inc., Munich, 2004. ISBN 3-8273-7138-4
  • Sustainable fiscal policy. Berlin scientific publishing. Berlin 2008, 1st edition
  • Is the market still be saved? Why do we now need a strong state. Econ Verlag, Berlin, 2009. ISBN 978-3-548-37341-6
  • Return to the D- Mark? . Earthscan, Munich, 2012. ISBN 978-3-426-27613-6
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