German economist details reasons of global economic repercussion
The Faculty of Business and Economics at Birzeit University hosted the former Director of the Division on Globalization and Development Strategies of the United Nation Conference on Trade and Development (UNCTAD), Heiner Flassbeck. In the lecture entitled “The Euro Crisis and Lessons for Developing Countries,” the Professor addressed the roots of the global economic crisis, and economic repercussions for developing countries.
Flassbeck, who is also a professor at the University of Hamburg, criticized the prevailing neoclassical approach to resolve the global economic problems. The neoclassical approach, according to the professor, claims that unit labor costs are closely correlated with inflation. On the contrary, he asserted that wages in states should rise in accordance with national productivity gains.
“Many Asian countries, especially China and Japan, have raised the real wage value parallel to the level of productivity,” the professor pointed out. Focusing on Germany as the only successful story in the European Union, he said, “Low nominal wage rises in Germany remain far below productivity, but this is an exception.”
Professor Flassbeck was invited by the Palestine Economic Policy Research Institute (MAS) to deliver the Ninth Annual Development Lecture (2017) in memory of Palestinian political economy professor Yusif Sayigh. The lecture series aims to prompt a critical, heterodox debate about globalization, economic development, and alternative economic policy concepts.