In addition, unemployment is low, households are not burdened by excessive debt and real wages are rising on account of low inflation. The German economy grew by 1.6% in real terms in 2014.
Infrastructure spending can be particularly effective if it raises trend labour productivity, since it can help raise potential growth and ease pressures on the neutral rate.24 That said, government spending cannot solve everything either. We know that an aging population will put pressure on public finances through pensions and healthcare spending.