The strong case for a German fiscal stimulus

The strong case for a German fiscal stimulus

There is a compelling case for a targeted and intelligent German fiscal stimulus and, unlike many advanced economies, Germany has the resources to do it

German economic data illustrate a clear deterioration over the last 18 months. The growth slowdown was initially attributed to various idiosyncratic issues in the auto industry and then to capacity constraints in the German economy. However, it has since become clear that the German slowdown reflects the global growth slowdown and, in particular, the Chinese growth slowdown.

China’s slowdown is an important issue for Germany. Some 24 per cent of Germany’s non-European exports go to China....

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