Die sektorale Logik der deutschen Lohnzurückhaltung

The Sectoral Logic of German Wage Restraint The supply-side price surges since mid-2021 have raised concerns about the emergence of a wage-price spiral and therefore prompted new rounds of corporatist concertation. We conduct a sector-based analysis of productivity-adjusted labour cost increases between the establishment of monetary union and the emergence of the pandemic crisis, and compare the German results internationally. We argue that Germany, due to its accumulation of sectoral wage-repressing characteristics, is a rather unlikely case for a wage-price spiral. However, as these characteristics are not typical for all euro area countries but rather exceptional, country specific and differently sized wage-price spirals could emerge within the euro area. The perpetuation of different inflation levels would put the eurozone under severe stress