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Hans-Werner Sinn

Hans-Werner Sinn is Professor of Economics and Public Finance at the University of Munich and President of the CESIfo Group. Author of Can Germany Be Saved? The Malaise of the World’s First Welfare State (MIT Press) and other books, he is former president of the International Institute of Public Finance, and former chairman of the German Economic Association.

Titles by This Author

A Supply-Side Approach to Global Warming

The Earth is getting warmer. Yet, as Hans-Werner Sinn points out in this provocative book, the dominant policy approach--which aims to curb consumption of fossil energy--has been ineffective. Despite policy makers’ efforts to promote alternative energy, impose emission controls on cars, and enforce tough energy-efficiency standards for buildings, the relentlessly rising curve of CO2 output does not show the slightest downward turn. Some proposed solutions are downright harmful: cultivating crops to make biofuels not only contributes to global warming but also uses resources that should be devoted to feeding the world’s hungry. In The Green Paradox, Sinn proposes a new, more pragmatic approach based not on regulating the demand for fossil fuels but on controlling the supply.

The owners of carbon resources, Sinn explains, are pre-empting future regulation by accelerating the production of fossil energy while they can. This is the “Green Paradox”: expected future reduction in carbon consumption has the effect of accelerating climate change. Sinn suggests a supply-side solution: inducing the owners of carbon resources to leave more of their wealth underground. He proposes the swift introduction of a “Super-Kyoto” system--gathering all consumer countries into a cartel by means of a worldwide, coordinated cap-and-trade system supported by the levying of source taxes on capital income--to spoil the resource owners’ appetite for financial assets.

Only if we can shift our focus from local demand to worldwide supply policies for reducing carbon emissions, Sinn argues, will we have a chance of staving off climate disaster.

The Malaise of the World's First Welfare State

What has happened to the German economic miracle? Rebuilding from the rubble and ruin of two world wars, Germany in the second half of the twentieth century recaptured its economic strength. High-quality German-made products ranging from precision tools to automobiles again conquered world markets, and the country experienced stratospheric growth and virtually full employment. Germany (or West Germany, until 1989) returned to its position as the economic powerhouse of Europe and became the world's third-largest economy after the United States and Japan. But in recent years growth has slowed, unemployment has soared, and the economic unification of eastern and western Germany has been mishandled. Europe's largest economy is now outperformed by many of its European neighbors in per capita terms. In Can Germany Be Saved?, Hans-Werner Sinn, one of Germany's leading economists, takes a frank look at his country’s economic problems and proposes welfare- and tax-reform measures aimed at returning Germany to its former vigor and vitality.Germany invented the welfare state in the 1880s when Bismarck introduced government-funded health insurance, disability insurance, and pensions; the German system became a model for other industrialized countries. But, Sinn argues, today's German welfare state has incurred immense fiscal costs and destroyed economic incentives. Unemployment has become so lucrative that the private sector, already under pressure from international low-wage competitors, has increasing difficulties in paying sufficiently attractive wages.Sinn traces many of his country's economic problems to an increasingly intractable conflict between Germany’s welfare state and the forces of globalization. Can Germany Be Saved? (an updated English-language version of a German bestseller) asks the hard questions--about unions, welfare payments, tax rates, the aging population, and immigration--that all advanced economies need to ask. Its answers, and its call for a radical rethinking of the welfare state, should stir debate and discussion everywhere.

The Economic Unification of Germany

The unification of Germany is one of the most wrenching and dramatic transitions in economic history. A policy issue of worldwide interest, it holds key lessons for the remaining post-socialist economies. In Jumpstart two well-known German economists synthesize a vast body of literature to present the first well-structured, clearly argued analytical account of the reunification process and the policy alternatives. The Sinns' authoritative and primarily nontechnical account will Interest nonspecialists who want to keep up with economic events. Their summary of the German experience with radical reform will provide a valuable reference for specialists in transition economics.Contrary to fears that German reunification would bring on a resurgence of nationalism, the Sinns point out, It has met with apathy and indifference. Nonetheless, a great deal is at stake in the battle for redistribution, and the present economic chaos poses a serious threat to social stability.The Sinns suggest a "social pact" between labor and management that could put an end to the struggle over distribution and speed up the transformation of the former East German communist economy into a market economy. The core of this pact is a shift In emphasis from factor prices to the fundamental Issues of compensation and the distribution of real wealth.Gerlinde Sinn was formerly Lecturer in the Department of Statistics at Dortmund University and in the Department of Economics at Mannheim University. Hans-Werner Sinn is Director of the Center for Economic Studies at University of Munich.

Titles by This Editor

Economists disagree on what ails the economies of continental western Europe, which are widely perceived to be underperforming in terms of productivity and other metrics. Is it some deficiency in their economic system--in economic institutions or cultural attitudes? Is it some effect of their welfare systems of social insurance and assistance? Or are these systems healthy enough but weighed down by adverse market conditions? In this volume, leading economists test the various explanations for Europe’s economic underperformance against real-world data. The chapters, written from widely varying perspectives, demonstrate the shortcomings and strengths of some methods of economics as much as they do the shortcomings and strengths of some economies of western continental Europe. Some contributors address only income per head or per worker; others look at efficiency and distortions of national choices such as that between labor and leisure; still others look at job satisfaction, fulfillment, and rates of indigenous innovation. Many offer policy recommendations, which range from developing institutions that promote entrepreneurship to using early education to increase human capital.

The trend toward privatization, which began with privatization experiments in the UK under Margaret Thatcher and the deregulation of the telecommunications sector in the United States, has attracted the attention of policymakers over the past two decades. Privatization is broadly supported by most academic economists, but the results of actual privatization efforts seem mixed. In the UK, for example, telecom rates fell sharply after privatization, but privatized rail service was widely perceived to have declined dramatically in quality. In this CESifo volume, international experts examine the experiences of 10 EU countries, evaluating the real outcomes of privatization policies in Austria, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Spain, and the UK.The effects of privatization--which includes not only changes in ownership of public activitiesand entities but also liberalization of markets and deregulation--are difficult to distinguish from the effects of other economywide influences. The studies in this volume meet this methodological challenge by using a well-defined set of criteria, including reducing consumer prices, increasing quantity, and improving quality, by which to make their assessments. Background chapters provide a conceptual framework for considering the issues.Contributors:Pablo Arocena, Sean D. Barrett, Ansgar Belke, Michel Berne, Henrik Christoffersen, Andrea Goldstein, Günter Knieps, David Newbery, Martin Paldam, David Parke,r Gérard Pogorel, Friedrich Schneider, Eric van Damme, Ingo Vogelsang, Johan Willner

The success of European monetary integration -- called by the editors of this CESifo volume "one of the most far-reaching, real world experiments in monetary policy to date" -- is not assured. Policy makers have been forced to deal with challenges posed by formulating a uniform monetary policy for countries with asymmetric business cycles and economies in different stages of development as well as with the fiscal and financial implications of a unified currency.The contributors to European Monetary Integration, all prominent economists and scholars, combine theoretical analysis and policy recommendation in their examination of these difficulties. In the first three chapters they consider issues raised by asymmetry problems, including imperfect labor and goods markets, the problem of monetary policy objectives when "one size does not fit all," and the possibility of a bias toward smaller countries in the "one country, one vote" constitutional structure of the European Central Bank. In the last three chapters, they discuss fiscal concerns, including the distribution of seignorage revenues and the interaction of European Central Bank monetary policies and asset price dynamics.

The sixteen essays in this book were written to celebrate the ninetieth birthday of Richard Musgrave and to commemorate the tenth anniversary of CES, the Center for Economic Studies at the University of Munich. Musgrave is considered to be a founding father of modern public economics. He belongs to the intellectual tradition that views government as an instrument that can be used to correct market failure and to establish the society that people want. Although his work fits within the individualistic framework of modern economics, he also draws on principles of moral philosophy.

The essays take stock of and extend the theory and practice of public finance and public policy. They address the evolving role of government and the welfare state, the interaction between taxation and markets, the future of pension and health care systems, and international tax issues and fiscal federalism.