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From Risk to Opportunity Insurer Responses to Climate Change 2008

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Clearly, a straightforward implication of wages being determined by sectoral conditions would be that industry-level contracts offer little scope for adjustments of individual wages to firm-specific demand shocks, even if the latter are of permanent nature. However, as demonstrated in Section 2.2, industry-level contracts do not necessarily provide an obstacle to the adjustment of wages to local conditions, as recent decentralisation tendencies in Germany have introduced the option of making such wage adjustments. Given that full insurance is likely to induce substantial job loss if demand disturbances have a more permanent character, a natural expectation is that this potential should at least have been exploited to allow for...
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From Risk to Opportunity Insurer Responses to Climate Change 2008

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