ABSTRACT
Germany and America are haunted by different ghosts, floating into consciousness from opposite directions. The mercantilist drive found expression in German ambitions for global economic influence as an instrument of national power and prestige. The German Empire took great pride in the symbols of its new industrial might. Going back to the medieval tradition of government concern for the unfortunate and of a strong role in the economy, various systems of German government involvement and supervision have established a complex web of rules, regulations, and subsidies that often discourage enterprise, innovation, and initiative. On the German side, the philosophical origins of German policies appear difficult and perhaps impossible to overcome. The German-American dialogue about macroeconomic policy is troubled by all the considerations by the obligation to work ever more closely together. The conservative policies and the disinflationary bias of German economic management may work less well as Germany becomes a primary determinant of global policy.
