Inclusive Growth for Germany 7: Balanced Budget and Investment Rule: Two Sides of the Same Coin?!

Summary:

While some of its European neighbors are still feeling the after-effects of the debt and structural crises, Germany appears to have come out the other side relatively unscathed. Yet, the current era of relative prosperity could well be built on higher costs for future generations as a lack of public investments over the last decade in Germany becomes apparent. Indeed, Germany is draining more and more of its public capital stock, leading experts to call for a strong investment rule for the German government.

This Study by the Bertelsmann Stiftung and Prognos AG examines how different paths in public investment from here on out would affect the economy through a variety of different channels. The results show that there is a clear economic and fiscal incentive for higher public investments in Germany now.

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