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A planned welfare overhaul is likely to make the problem worse by weakening incentives for second earners in poor families to work, they say.
Spillover effects across LAs may also raise coordination issues by weakening incentives to expand care home capacity.
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Many economists warn that higher income tax rates would weaken incentives to save and invest.
Speaking in Washington on Monday, Mr. Weidmann said that aid had already weakened incentives for countries to behave responsibly.
The Bundesbank warned against easing Greece's bailout terms, saying that such a move "would damage confidence in all euro area agreements and treaties and strongly weaken incentives for national reform and consolidation measures".
It said such a policy would reduce domestic prices in the short term but weaken incentives to explore and extract more gas "to the detriment of the level and diversity of supply for domestic gas users".
The German central bank, the Bundesbank, warned in its monthly report Wednesday that the Greek situation was "extremely worrying," but that easing Greece's bailout terms "would damage confidence in all euro-area agreements and treaties and strongly weaken incentives for national reform and consolidation measures".
Last year seemed like a dark one for the solar industry: stiff competition from China drove American manufacturers to layoffs and even bankruptcy, while the low price of natural gas and the loss of a critical government subsidy weakened incentives for new solar developments.
In fact, near zero policy rates, combined with abundant and nearly unconditional liquidity support, weaken incentives for the private sector to repair balance sheets and for fiscal authorities to limit their borrowing requirements.Of course, this last point is (not explicitly) part of the rationale.
Burma's reforms have prompted the US and Europe to ease economic sanctions they imposed during the military's regime, but many human rights groups have warned that while those moves are good for the country's development they will weaken incentives to continue democratic reforms.
But critics argue that large presence of foreign workers are simply a cost-cutting measure aimed at keeping a lid programming wages and effectively weaken incentives for would-be American tech workers to learn important skills.
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