Thesis Goemann
Thesis Goemann
- “economical peaks” in second sentence. Some more errors there.
- Figure 14 suggests German unemployment never exceeded 5% in the last two decades and dropped to 0% in 2009, clearly wrong.
- Minimum wage in absolute, nominal terms not that informative. Relative to mean or median is a better choice.
- Occasional grammatical or stylistic errors.
- Technical part reviewing various aspects should be shorter, more concise.
The value added of the thesis lies in synthesizing the economic theory related
to the STW. The technical details, such as length of the STW, minimum requirements,
etc, should only be covered in greater detail if they are later on explored further
in the main part of the thesis concerning its effect on the labor market. For example,
the length of the STW deserves a longer discussion only if later on it is discussed how the costs or
benefits of the STW depend on its length.
- Not every statement properly explained. For example, why is the total fiscal cost
of unemployment larger than the nominal spending on UB?
- footnotes should refer to the whole sentence and be included at its end.
- the crux of the social desirability of STW is the liquidity constrains of the firm.
If layoffs and rehires are expensive for the firm, why would the firms decide to go
through it in the first place? And if it did, why would the state think it needs
to discourage that. The answer is that, the STW is desirable only if firm doeasn’t want to layoff workers
but if forced by temporary problems with liqudity - it doesn’t have enough cash to pay wages,
but the firms believes the profitability will rebound sometime in the near future. And, crucially,
the society as a whole will benefit from the firm continuing operation in the future.
This key underlying justification of the STW received only one sentence in the thesis.
- Similar note to the sentence: “Consequently, the demand is lower than the supply,
and the policy should try to either reduce supply or increase demand”.
Why? The wage can simply adjust to equilibrate the market again.
The explanation for the desirability of state intervention in the market is missing.
- The discussion on productivity effects conflates composition effects (low
productivity workers are laid off, so measured labor productivity increases “artificially”)
with misallocation effects (workers are stuck at inefficient jobs that should be destroyed,
and do not move to more productive jobs at which their productivity would be higher).
Misallocation can be explained as the existence of firms that are not deemed desirable
by the society.
- Interpretation of tight market in the covid: very unusual recession, people afraid to work,
data unreliable.
- The MPC discussion hard to understand.