saw Germany's attractiveness as an investment location endangered by too high labour costs and called for structural reforms of the labour market. These include escape clauses for collective wage agreements, the abolition of dismissal protection laws and longer working hours without wage compensation. He has also criticised the employment-restricting effects of the German wage replacement system. As an alternative he developed in 2002 the model of activating social welfare. His policy recommendations influenced the Agenda 2010 reforms. According to Prof. Wolfgang Wiegard, then chairman of the Council of Economic Advisors, his work was the blueprint for the Agenda 2010 reforms. Sinn has called the German economy a "bazaar economy" because the share of input from abroad in German industrial production is on the increase. At the same time he points out that this is not to be equated with a breaking off of value added in exports. Instead Germany has decimated its domestic sector via excessive wage increases and has driven excess amounts of capital and skilled labour into the labour and knowledge-intensive export sectors, where fewer less-skilled workers can be employed as have been set free in the domestic sectors. At the expense of the domestic sectors, Germany has inflated value added in exports too strongly and at the same time has placed too much emphasis on the final stages of production. As a result, a pathological export boom occurred. The world economic crisis is traced back by Sinn to abuse of liability limitation by American investment banks. The lack of capital reserve requirements gave these banks the possibility to pursue their business with inadequate capital reserves and encouraged them to gamble. In addition the lack of personal liability for homeowners created in a similar way an exaggerated willingness to take risks and thus caused the United States housing bubble. To correct this situation Sinn has called for considerably higher capital reserve requirements, the balancing of offshore business and a return to the accounting principle of the lower of cost of the German Commercial Code (HGB). Against the background of the Great Recession, Sinn advocates a return to the tradition of ordoliberalism and of ordoliberal economists like Walter Eucken, Alfred Müller-Armack, Alexander Rüstow, and Ludwig Erhard, who argued a strong state should provide a framework or economic order inside which market forces and free market competition can develop. Markets do not regulate themselves (Selbstregulierung), but are capable of self-controlled