The rapid wage increases observed in Eastern Germany over the past two years have important implications for the direction taken by structural change in this region. These implications are not solely negative, and remain controversial in the public debate. This paper discusses four aspects of a `high wage policy' on the economic assumptions necessary to generate them.
Burda, M and M Funke (eds) (1992), “DP652 Trade Unions, Wages and Structural Adjustment in the New German States”, CEPR Press Discussion Paper No. 652. https://cepr.org/publications/dp652