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The German far right and the scars of reunificationOliver HoltemöllerFinancial Times, September 6, 2024
The anticipation of a future bailout of distressed firms worsens ex ante adverse selection, causing a market freeze at present and inviting government intervention ("bailout trap").
This paper proposes a new approach to evaluate the macroeconomic effects of the Hartz IV reform in Germany, which reduced the generosity of long-term unemployment benefits.