I’ve been off the blogs of late because of a Very Exciting Project that I’ll discuss when it’s ready. But I’m back, with a post on Foreign Exchange about the so-called German miracle:
The econo-world has been abuzz about Germany because the country has done a remarkable job outperforming its first world peers as it emerges from the Great Recession. Last quarter, it went on a 9% growth rampage. This year, it’s expected to grow over 3%, compared with less than 2% for the most of the developed world. When econo-wonks process those stats, they try to claim the success story as a victory for their preferred models, while constructing any downsides as failures of the other side. They are wrong to do so.
Instead, the argument I make in the post is that the German model is a happy historical accident. And as you may know, I enjoy arguing that history matters. But I also resist the notion that history is everything. So while I think it’s important to understand the present-day German economy as a product of its history, I don’t the like the argument–which smart people still make–that present-day Germany should make its decisions about the future on the basis of some guilt about its past.