Experts Predict Tough Times Ahead for Germany
Economist Daron Acemoglu, who won the Nobel Prize in Economics, voiced his criticisms about Germany's debt brake. He argued, as published in the "Frankfurter Allgemeine Zeitung", that Germany's main issue is its deteriorating infrastructure. According to him, "cramping your style in such times isn't logical." Acemoglu is against the strict limits enforced by the debt brake.
Instead, he suggests boosting public-private investments in newer technologies and infrastructure. "This is the key to Germany's future prosperity," he said. Regarding the country's economic circumstance, he acknowledged, "it's quite clear that Germany has some tough years ahead." However, he believes that the German economic model still possesses resilience.
Acemoglu highlighted the system of co-determination in German companies and the vocational training and further education system as examples of Germany's strengths. Acemoglu is a professor at the Massachusetts Institute of Technology in Boston, where he shared the 2021 Nobel Prize in Economics with Simon Johnson and James A. Robinson. Their research topics include prosperity and the decline in prosperity between various countries. The researchers will receive their awards on Tuesday evening. The winners of the 2021 Nobel Prizes were announced in October.
Acemoglu criticizes Germany's adherence to strict budgetary policy through the debt brake, arguing that it restricts investment in infrastructure and newer technologies. To counter this, he proposes relaxing budgetary constraints to boost public-private investments as a strategy for Germany's future prosperity.
