Infobox_Economist
school_tradition = Neoclassical economics
color = #B0C4DE
image_caption =
name = Hans-Werner Sinn
birth = birth date and age|1948|3|7
Brake, Westphalia
death =
nationality = flag|Germany
field = Economics
influences =
opposed = Rudolf Hickel, Peter Bofinger
influenced =
contributions =
Hans-Werner Sinn (born March 7, 1948 in Brake, Westphalia) is a German economist.
Education and career
After studying economics at the University of Münster from 1967 to 1972 and receiving his doctorate from the University of Mannheim in 1978, Sinn was awarded the venia legendi in 1993, also from the University of Mannheim.
Since 1984 Sinn has been full professor in the faculty of economics at the University of Munich (LMU), first holding the chair for economics and insurance, and from 1994 the chair for economics and public finance. During leaves of absence from Mannheim and Munich he held visiting professorships (1978/79 and 1984/85) at the University of Western Ontario in Canada. During sabatticals he was also visiting researcher at the London School of Economics, as well as at Bergen, Stanford, Princeton and Jerusalem University. Since 1988 he has been honorary professor of the University of Vienna, where he has held many lectures. Since 1 February 1999 Sinn has been president of the Ifo Institute for Economic Research. In 2006 he became president of the International Institute for Public Finance ( [http://www.iipf.org IIPF] ). From 1997 to 2000 Sinn headed the Verein für Socialpolitik, the association of German-speaking economists founded in 1873 by the so-called “socialists of the chair” (Kathedersozialisten).
Sinn is regarded as one of the most influential and internationally acclaimed German economist. He is one of the few German-speaking fellows of the National Bureau of Economic Research in Cambridge, Mass., and was the first German-speaking economist to deliver the prestigious Yrjö Jahnsson Lectures [ [http://www.yjs.fi/index_eng.cfm?rID=2&lgID=2&tID=31 Yrjö Jahnsson Lectures] ] in Helsinki and the Tinbergen Lectures in Amsterdam. His oeuvre includes 7 major monographs in 32 editions and in 6 languages (excluding works as editor), 11 shorter monographs and 130 academic papers, of which 80 have been published in international, peer-reviewed journals.
Since Sinn became president of the Ifo Institute in the late stage of his professional career, he has achieved a public presence comparable to no other economist. He has published 50 longer policy contributions in anthologies and journals, written 190 newspaper articles and given more than 200 newspaper interviews. In addition he has made 20 longer contributions for radio and television and has made more than 100 talk-show appearances. More than twenty articles on his person have been published in German and foreign newspapers. [ [http://www.cesifo-group.de/link/_ifocv_sinn_h_lang CV with list of publications] ]
Sinn is the author of the best-seller " _de. Ist Deutschland noch zu retten?", which has stimulated policy discussion in Germany in recent years. The book, the most popular public policy monograph written by a German economist in recent history, appeared in English as "Can Germany be Saved?” from MIT Press in 2007. Sinn’s theses are provocative because they question the basic tenants of the German social system. Lothar Späth has called Sinn the “plain talking” specialist, [cite news |first=Kolja |last=Rudzio |authorlink= |coauthors= |title=Was bewegt… Hans-Werner Sinn? |url= |work=Die Zeit |publisher= |date=2005-03-31 |accessdate= ] Klaus von Dohnanyi observed that “we would be back on course if the majority of Germans grasped what Sinn is saying,” and Roland Berger described his analysis as “astute and brilliant”. [see [http://www.cesifo-group.de/link/_publsinndtld2003 "Stimmen zum Buch"] ] As a reaction to the criticism of his book in the media, Sinn wrote a follow-up book in 2005, "Die Basarökonomie". Sinn is on the Board of Supervisors of HypoVereinsbanks and carrier of the Federal Cross of Merit. He is not affiliated with a political party.
In the 2006 Handelsblatt ranking of German economists ( [http://www.handelsblatt.com/news/SingleClip.aspx?_t=dgtool&obj=1&id=2 Ökonomen-Ranking VWL] ), based on cross citations of SSCI papers in SSCI journals, Sinn ranked fourth. [http://www.handelsblatt.com October 1, 2006] In a study by Ursprung and Zimmer, [cite journal |last=Ursprung |first=Heinrich W. |authorlink= |coauthors=Zimmer, Markus |year=2007 |month= |title=Who is the 'Platz-Hirsch' of the German Economics Profession? A Citation Analysis |journal=Jahrbücher für Nationalökonomie und Statistik |volume=227 |issue=2 |pages= |id= |url=http://www2.wiwi.hu-berlin.de/institute/wpol/pdf/WhoIsThePlatzhirsch.pdf |accessdate= |quote= ] based on SSCI citations per author of the full oeuvre, Sinn ranked second of all German economists, after Nobel laureate Reinhard Selten. In the RePEc database he was the German economist most frequently quoted in academic works in 2006. [ [http://www.cesifo-group.de/cesifo/newsletter/top20econ.htm The RePEC Ranking of German Economist Working in Germany] The list was compiled with the information available on the RePEc website on October 1, 2006.] In a survey conducted by the Financial Times Deutschland among more than 550 German economic experts, Sinn was one of the two professors in Germany (the other was Herbert Giersch) to attract a large following of academic pupils, and in terms of political influence he ranked only behind Bert Rürup at the top of the list of German professors. [cite news |first=Thomas |last=Fricke |authorlink= |coauthors= |title=Was Ökonomen wirklich wollen |url=http://www.ftd.de/politik/deutschland/71723.html?eid=72438 |work=Financial Times Deutschland |publisher= |date=2006-05-10 |accessdate= ]
Economic-policy positions
Sinn criticizes the escalation of German wages from 1970 to 2000 and the growth of a welfare state based on wage replacement incomes, which, in his opinion, is largely responsible for mass unemployment among low-skilled workers. He points out the many adjustments that are necessary to strengthen Germany’s role in a globalised economy. They include reducing the power of the trade unions and improving the incentive structures of the welfare state.
Sinn believes that the welfare state is necessary to assist the weak members of society, since income distribution in a market economy is very uneven and unfair. Because of this position, the former president of the Kiel Institute for International Economics, Horst Siebert, accused Sinn of idolizing the state. [ [http://www.cesifo-group.de/link/DERSOZIALLIBERALE.PDF WirtschaftsWoche October 8, 1998] (PDF)] The welfare state is the essence of the social market economy, and must be retained under all circumstances. However, Sinn feels that the German welfare state has structural flaws and argues for a restructuring. Unemployment benefits, for example, weaken the willingness to take on a job at the same or lower pay. It is understandable, he argues, that no one will go to work if he gets more from the state for not working. Unemployment compensation functions as a minimum wage that destroys the jobs of those people whose productivity is lower than this minimum wage. The state, in Sinn’s opinion, should pay people for participating in and not for staying away from the labor market. In the welfare state, wage distribution has been compressed from below (“accordion effect”). This is why in Germany has a very low wage spread, in an international comparison, and is the world champion in unemployment among the low skilled.
Sinn favors a minimum income instead of a minimum wage. The state should pay individually calculated wage subsidies (activating social welfare). This will expand the wage spread downwards, create new jobs and at the same time ensure a minimum standard of living in accord with a society’s social objectives. The economically weaker members of society would then have two income sources: a low income from their wages, which corresponds to their productivity, and a government wage subsidy. With the combi-wage model of the Ifo Institute, two million new jobs would be created in Germany, especially for low-skilled workers. In addition, Sinn proposes municipal loan employment with which a wage income equal to the lowest level of unemployment compensation can be earned. In this way, full minimum earnings protection can be achieved.
Sinn also favors a loosening of Germany’s dismissal protection laws. He proposes letting employees decide whether to take a job with higher pay and lower dismissal protection or lower pay and higher protection. Sinn also is a strong advocate of worker participation schemes in the form of company shares or profit sharing. He criticizes the trade unions for opting for co-determination instead of participation, since co-determination provided more paid positions for union officials.
Sinn has also voiced criticism of Helmut Kohl’s economic policies in connection with German reunification. The Treuhandanstalt privatization agency should have been involved in the initial collective wage bargaining in eastern Germany in order to prevent western German competitors from forcing through wages in eastern Germany above the productivity level. In particular the Treuhandanstalt ignored the stipulation of the Treaty of German Unification that possibilities be created for giving former GDR citizens evidenced share rights to former national assets.
To make German workers “more competitive”, Sinn has argued for an increase in weekly working hours in Germany from 38 to 42 hours without pay increases.[Frankfurter Allgemeine Zeitung 262, November 9, 2006, p. 13] In addition to a direct lowering of wage costs, this would make all workers more productive and would increase supply and demand. Calculations show that this would result in a six to ten percent growth surge. An extension of working hours is exactly the same as technological progress. In his opinion, one cannot advocate technological progress and at the same time oppose an extension of working hours, since economically they are one and the same thing.]In various public commentaries, Sinn has expressed opposition to various economic-policy measures that many of his critics attempted to derive from Keynesian economics. In an article in the Frankfurter Allgemeine Zeitung on 23 December 1998, he labeled Keynesianism as “extinct” in terms of providing a comprehensive theory of economics. In keeping with the consensus of neoclassical economics, he sees the role of Keynes as limited to explaining economic cycles. (“You can also call me a Keynesian if you want”.)[ [http://www.cesifo-group.de/link/_echointerv?item_link=ifointerview-Zeit13-05-04.htm Die Zeit, Mai 13, 2004: "Sparen!" – "Nein, bloß nicht!" (debate between Sinn and Bofinger)] see his final response] His economic forecasting at the Ifo Institute is also based on the Keynesian methodology. He warns against the misconception, however, that with state-induced demand policies Germany’s primarily structural problems on the labor market can be solved. For the long term, beyond the business cycle, Keynesian theory is useless. What happens in the long term is best explained by supply-side economics.]Sinn favors restricting managerial rights in order to prevent enterprise acquisitions via compensation payments to manager.
In an interview with the Süddeutsche Zeitung in October 2007 Sinn pointed out that markets are not “just” but that they are “efficient”: “Somewhat more inequality in income distribution has the effect that even those who benefit less ultimately have a higher standard of living than they would have in an egalitarian system where all have the same income and all are equally poor.” In accordance with Adam Smith’s invisible hand, Sinn has stated: “All people in a market economy think first of their own well-being, and in spite of this the market economy still functions. It does not need the good human being but it functions with people who seek to maximize their own utility.” [ [http://www.sueddeutsche.de/wirtschaft/special/698/139408/index.html/wirtschaft/artikel/600/139310/article.html "Ungerecht lebt es sich besser" - October 24, 2007] ] Sinn is thus a proponent of the “capitalist paradox”, according to which individual utility is the basis of the general public welfare.
Research
With the exception of his diploma dissertation, also published in a journal, on the Marxian Law of the tendential decline of the rate of profit, Sinn dealt in his early years particularly with economic risk theory. He made a name for himself with his dissertation “Ökonomische Entscheidungen bei Ungewessheit” (1980), published in English as “Economic Decisions under Uncertainty” (1983), with numerous spin-off articles. This work focused on the axiomatic comparison between expected utility and mean-variance analysis, on the foundation of the principle of insufficient reason and on the psychophysical foundation of risk preference functions.
A large number of publications covering a broad economic spectrum followed: on the theory of economic cycles, environmental economics, foreign trade issues and, in particular, public finance.
Problems of longer-term economic growth were also on his research agenda. Sinn was the first economist to formulate the central-planning model of economic growth in the tradition of Robert Solow as a general equilibrium model with decentrally optimizing agents and market clearing conditions in an article published in German in 1980 and two years later in English, and before similar work by Chamley in 1981 and Abel and Blanchard in 1983. [cite journal |last=Abel |first=Andrew B. |authorlink= |coauthors=Blanchard, Olivier J. |year=1983 |month= |title=An Intertemporal Model of Saving and Investment |journal=Econometrica |volume=51 |issue=3 |pages=675–692 |doi=10.2307/1912153 |url= |accessdate= |quote= ] [cite journal |last=Chamley |first=Christophe |authorlink= |coauthors= |year=1981 |month= |title=The Welfare Cost of Capital Income Taxation in a Growing Economy |journal=Journal of Political Economy |volume=89 |issue=3 |pages=468–496 |doi=10.1086/260981 |url= |accessdate= |quote= ] [cite book |chapter=Besteuerung, Wachstum und Ressourcenabbau. Ein allgemeiner Gleichgewichtsansatz |title=Erschöpfbare Ressourcen |last=Sinn |first=Hans-Werner |authorlink= |editor=Siebert, H. |year=1980 |series=Papers & Proceedings of the German Economic Association |publisher=Duncker und Humblot |location=Berlin |isbn= |pages=pp. 499–528 |url= ] [cite journal |last=Sinn |first=Hans-Werner |authorlink= |coauthors= |year=1982 |month= |title=Taxation, Growth, and Resource Extraction: A General Equilibrium Approach |journal=European Economic Review |volume=19 |issue=2 |pages=357–386 |doi=10.1016/S0014-2921(82)80060-3 |url= |accessdate= |quote= ]
On the basis of this model Sinn presented new theoretical findings on capital income taxation published in a second dissertation (Habilitationsschrift) and in parallel articles. For his analysis of the stimulus effects of accelerated depreciation and the various components of capital income taxation on intertemporal, international and intersectoral allocation, he gained an international reputation. His book, Capital Income Taxation and Resource Allocation (1987), is still one of the standard works in the field. [Capital Income Taxation and Resource Allocation, North Holland: Amsterdam, New York, Oxford and Tokyo 1987.]
In the discussion of the theses of the Club of Rome, Sinn has dealt intensely with the theory of exhaustible natural resources in a good dozen scholarly articles. These include studies on the supply dependency of extraction costs, on the “tragedy of the commons” when property rights of oilfields are not clearly defined as well as on the taxation effects on the extraction path.
After his appointment to the advisory council of the German Federal Ministry of Economics, Sinn shifted his research emphasis from economic theory to policy matters. After some disagreement with privatization proposals of the advisory council, to which he drafted a minority opinion, he wrote the book Kaltstart (1991), together with his wife Gerlinde, the first monograph on the economic problems of German unification, now regarded as a standard work on this subject. He described the policy of the German government as a bankruptcy administrator with a social compensation plan and predicted the rapid demise of eastern German industry, which many at the time regarded as overly pessimistic.
At the end of the 1990s Sinn wrote a critical monograph on the role of the German state-owned regional banks (Landesbanken), and in his book, The New Systems Competition (2003), based on his Yrjö Jahnsson Lectures in Helsinki in 1999, he described how the European welfare state was endangered by the forces of systems competition. In various articles in the 1990s, he warned of the erosive effects of international tax competition and the negative results of globalization on income distribution. The decade-long trend in increasing unemployment in Germany and its possible causes was the motivation for his book, Ist Deutschland noch zu retten? (2003), which has appeared in eleven print runs in Germany and in Korean and English translations. In the book he primarily looks at the structural problems of the German labor market and social welfare system but also examines the extremely low birthrate in Germany, immigration and questionable developments in European social policy resulting from a disregard of economic principles.
In his book Die Basarökonomie, Sinn analyses the influence of international low-wage competition on horizontal and vertical industry structures in Germany. Because of the foreign low-wage competition, many domestic industries with high labor costs (textiles, services, etc.) have collapsed, setting their capital, talent and simple jobs free, which then seek and partly find new opportunities in the capital and knowledge-intensive export sectors of the economy. This process can be understood as an improvement in the international division of labor, but it exceeds its optimum level because of high and rigid wages. Too much value added is produced by exports at the expense of the domestic sector. At the same time, too large a portion of economic activity is concentrated on the downstream stages of production process (bazaar effect): The production depth declines too rapidly because labor costs of workers in German manufacturing are still the highest by far of all large industrialized countries. Germany is developing into a bazaar economy that earns its money primarily from exports. The high value added in exports is purchased at the expense of an excessive shrinkage of the labor-intensive domestic sector and ensuing high unemployment. The country has a record level of exports because it suffers from horizontal and vertical over-specialization.
Family
Sinn lives with his wife near Munich. They have three adult children.
Affiliations
* President of the International Institute of Public Finance (2006–2009)
* European Economic Advisory Group at CESifo (since 2001)
* North-Rhine Westphalian Academy of Sciences (since 2001)
* Bavarian Academy of Sciences, historical-philosophical division (since 1996)
* National Bureau of Economic Research (NBER), Cambridge, Mass., Research Associate
* Member of the Advisory Council of the German Ministry of Economics (since 1989)
Awards
* Bavarian Maximilian Order for Science and Art (2008)
* The World Economy Annual Lecture, University of Nottingham (2005)
* German Federal Cross of Merit, first class (2005)
* CORINE International Book Prize (2004)
* Tinbergen Lectures, Royal Netherlands Economic Association (2004)
* Economics Book Prize of the Financial Times Deutschland and getAbstract AG (2003)
* Honorary Award of the Wirtschaftsbeirates der Union e. V. (2003)
* Stevenson Lectures on Citizenship, University of Glasgow (2000)
* Distinguished Scholar, Atlantic Economic Society (2000)
* German Federal Cross of Merit, on ribbon, (1999)
* Yrjö Jahnsson Lectures, University of Helsinki (1999)
* Honorary doctorate (Dr. rer. pol. h.c.), University of Magdeburg (1999)
* Special Prize of the Herbert Quandt Foundation (1997)
* Honorary Professorship, University of Vienna (1988)
* First Prize of the University of Mannheim for Habilitation dissertation (1984, Schitag Foundation)
* First Prize of the University of Mannheim for doctoral dissertation (1979, Rheinische Hypothekenbank Foundation)
* [http://ideas.repec.org/top/top.person.all.html Top 500 Economists in the World] according to IDEAS/RePEc
Selected publications
*cite journal |last= |first= |authorlink= |coauthors= |year=1980 |month= |title=A Rehabilitation of the Principle of Insufficient Reason |journal=Quarterly Journal of Economics |volume=94 |issue=3 |pages=493–506 |doi=10.2307/1884581 |url= |accessdate= |quote=
*cite journal |last= |first= |authorlink= |coauthors= |year=1981 |month= |title=Stock–dependent Extraction Costs and the Technological Efficiency of Resource Depletion |journal=Zeitschrift für Wirtschafts– und Sozialwissenschaften |volume=101 |issue= |pages=507–517 |id= |url= |accessdate= |quote=
*cite book |title=Economic Decisions under Uncertainty |last= |first= |authorlink= |coauthors= |year=1983 |publisher=North-Holland |location=Amsterdam |isbn=0444863877 |pages= |url=
*cite journal |last= |first= |authorlink= |coauthors= |year=1984 |month= |title=Common Property Resources, Storage Facilities and Ownership Structures: A Cournot Model of the Oil Market |journal=Economica |volume=51 |issue=203 |pages=235–252 |doi=10.2307/2554543 |url= |accessdate= |quote=
*cite book |title=Capital Income Taxation and Resource Allocation |last= |first= |authorlink= |coauthors= |year=1987 |publisher=North Holland |location=Amsterdam |isbn=0444702083 |pages= |url=
*cite journal |last= |first= |authorlink= |coauthors=Howitt, P. |year=1989 |month= |title=Gradual Reforms of Capital Income Taxation |journal=American Economic Review |volume=79 |issue=1 |pages=106–124 |doi=10.2307/1804777 |url= |accessdate= |quote=
*cite book |title=Jumpstart. The Economic Unification of Germany |last= |first= |authorlink= |coauthors=Sinn, Gerlinde |year=1992 |publisher=MIT Press |location=Cambridge, MA |isbn=0262193272 |pages= |url=
*cite journal |last= |first= |authorlink= |coauthors= |year=1995 |month= |title=A Theory of the Welfare State |journal=Scandinavian Journal of Economics |volume=97 |issue=4 |pages=495–526 |doi=10.2307/3440540 |url= |accessdate= |quote=
*cite journal |last= |first= |authorlink= |coauthors= |year=1997 |month= |title=The Selection Principle and Market Failure in Systems Competition |journal=Journal of Public Economics |volume=66 |issue=2 |pages=247–274 |doi=10.1016/S0047-2727(97)00043-1 |url= |accessdate= |quote=
*cite book |title=The New Systems Competition |last= |first= |authorlink= |coauthors= |year=2003 |series=Yrjö Jahnsson Lectures |publisher=Basil Blackwell |location=Oxford |isbn=0631219528 |pages= |url=
*cite journal |last= |first= |authorlink= |coauthors= |year=2004 |month= |title=The Pay–as–you–go Pension System as a Fertility Insurance and Enforcement Device |journal=Journal of Public Economics |volume=88 |issue=7–8 |pages=1335–1357 |doi=10.1016/S0047-2727(03)00015-X |url= |accessdate= |quote=
*cite book |title=Die Basar–Ökonomie |last= |first= |authorlink= |coauthors= |year=2005 |publisher=Econ |location=Berlin |isbn=343018536X |pages= |url=
*cite book |title=Can Germany Be Saved? The Malaise of the World’s First Welfare State |last= |first= |authorlink= |coauthors= |year=2007 |publisher=MIT Press |location=Cambridge, MA |isbn=0262195585 |pages= |url=
References
External links
* [http://www.cesifo-group.de/HWS Personal Website]
* [http://www.project-syndicate.org/series/20/description A Transatlantic Perspective] Hans-Werner Sinn writes in Project Syndicate's monthly syndicated op/ed series "A Transatlantic Perspective", which explores the economic consequences of political decisions and how economic events shape politics, along with another distinguished political economist, Melvyn Krauss.
* [http://ideas.repec.org/e/psi146.html IDEAS/RePEc]
* [http://scholar.google.com/scholar?q=hans+werner+sinn&hl=en&lr=&btnG=Search Google Scholar]
