Das deutsche Rätsel

The article advances the hypothesis that Germany is unable to
increase its gains from trade despite increasing trading volumes.
High and rigid German wages argely result from the minimum wage
constraint imposed by a welfare state that offers generous
replacement incomes. Confronted by low-wage competition from
post-communist countries, Germany overspecializes in capital
intensive goods, which creates a pathological export boom in terms
of added value produced in exports. In addition, the country
overspecializes in downstream activities, which implies that export
quantities grow faster than value added. The reasons which induce
extremely high exports are the same as those which cause
unemployment to rise and the economy to stagnate.