March | 2012 | Michael Roberts Blog

But is this right? For a start, export growth for Spain, Germany and Greece since the start of the euro in 1999 up to the beginning of the global crisis has been more or less the same, with Spain doing even better than Germany. And yet Greek unit labour costs rose over 70% in this period, Spain’s were up 13%, while Germany’s fell. How is that possible? The answer is revealed if you go back further in time than 1999 and measure unit labour costs from say the early 1980s, it shows that for the 25 years up to 2005-6, the level of unit labour costs in southern Europe was lower than in Germany. The graphic shows unit labour costs relative to Germany from 1980.

via March | 2012 | Michael Roberts Blog

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