After studying economics at the University of Münster from 1967 to 1972 and receiving his doctorate from the University of Mannheim in 1978, Sinn was awarded the venia legendi in 1993, also from the University of Mannheim.
Since 1984 Sinn has been full professor in the faculty of economics at the University of Munich (LMU), first holding the chair for economics and insurance, and from 1994 the chair for economics and public finance. During leaves of absence from Mannheim and Munich he held visiting professorships (1978/79 and 1984/85) at the University of Western Ontario in Canada. During sabbaticals he was also visiting researcher at the London School of Economics, as well as at Bergen, Stanford, Princeton and Jerusalem Universities. Since 1988 he has been honorary professor of the University of Vienna, where he has held many lectures. Since 1 February 1999 Sinn has been president of the Ifo Institute for Economic Research. In 2006 he became president of the International Institute of Public Finance. From 1997 to 2000 Sinn headed the Verein für Socialpolitik, the association of German-speaking economists.
Sinn is fellow of the National Bureau of Economic Research in Cambridge, Massachusetts, and was the first German-speaking economist to deliver the Yrjö Jahnsson Lectures in Helsinki (1999) and the Tinbergen Lectures in Amsterdam (2004).
In the 2006 Handelsblatt ranking of German economists ( Ökonomen-Ranking VWL), based on cross citations of SSCI papers in SSCI journals, Sinn ranked fourth. In a study by Ursprung and Zimmer, based on SSCI citations per author of the full oeuvre, Sinn ranked second of all German economists, after Nobel laureate Reinhard Selten. In the RePEc database he was the German economist most frequently quoted in academic works in 2006. In a survey conducted by the Financial Times Deutschland among more than 550 German economic experts, Sinn was one of the two professors in Germany (the other was Herbert Giersch) to attract a large following of academic pupils, and in terms of political influence he ranked only behind Bert Rürup at the top of the list of German professors.
Sinn has published many journal articles, has written numerous newspaper articles and given many newspaper interviews. In addition he has made longer contributions for radio and television and has made many talk-show appearances. More than twenty articles on his person have been published in German and foreign newspapers. His book "" has stimulated policy discussion in Germany and influenced the Agenda 2010 reforms. With more than 100,000 copies in print, the book is one of the most popular public policy monograph in recent history. It has also been published in English as "Can Germany be Saved?" by MIT Press in 2007. As a reaction to the criticism of his book in the media, Sinn wrote a follow-up book in 2005, "Die Basarökonomie". His most recent book, "Das grüne Paradoxon", was published in October 2008.
Since 1989 Sinn has served on the Advisory Council of the German Ministry of Economics and he represents the Free State of Bavaria on the Board of Supervisors of HypoVereinsbank.
Sinn lives with his wife near Munich. They have three adult children.
With the exception of his diploma dissertation, also published in a journal, on the Marxian Law of the tendential decline of the rate of profit, Sinn dealt in his early years particularly with economic risk theory. He made a name for himself with his dissertation "Ökonomische Entscheidungen bei Ungewissheit" (1980), published in English as "Economic Decisions under Uncertainty" (1983), with numerous spin-off articles. Subsequent work focused on the axiomatic basis of mean-variance analysis, on the foundation of the principle of insufficient reason, on the psychological foundation of risk preference functions and on the analysis of risk decisions under limited liability, which he subsequently developed into a theory of bank regulation in his Yrjö Jahnsson Lectures, "The New Systems Competition". In 2003, in the journal Finanzarchiv, he touched off an academic debate on banking regulation in which he was criticised by liberal economists for his favouring of stronger banking regulation to prevent excess risk-taking. With his disseration in 1977 on excess risk propensity under liability restrictions, Sinn, in the opinion of Martin Hellwig, preceded the pioneering analysis of Stiglitz and Weiss of 1981. His work in this area was published as a reprint volume in 2008. On the basis of his research on risk theory, Sinn developed his influential theory of the insurer state, in which he interpreted the redistributing activity of the state via the tax-transfer system as insurance protection, showing that this activity can have a favourable influence on people's willingness to take risks. His work on the Theory of the Welfare State in 1995 is considered an important contribution on the legitimacy of state redistribution activity.
Sinn has published numerous studies on the theory of economic cycles, environmental economics, foreign trade issues, including ones on the so-called asset approach and on the micro foundations of a model of temporary general equilibrium.
Problems of longer-term economic growth were also on his research agenda. Sinn was the first economist to formulate the central-planning model of economic growth in the tradition of Robert Solow as a general equilibrium model with decentrally optimizing agents and market clearing conditions in an article published in German in 1980 and two years later in English, and before similar work by Chamley in 1981 and Abel and Blanchard in 1983.
His study on the stimulating effects of accelerated depreciation and the various components of capital income taxation on intertemporal, international and intersectoral allocation is still considered one of the standard works in this field.
Sinn contributed to the discussion on German pension reform with his article "Pension Reform and Demographic Crisis. Why a Funded System is Needed and Why it is Not Needed" published in 2000. Here, with the help of cash-value equivalents, he showed that the low returns from statutory pension insurance based on the pay-as-you-go method has only an apparent efficiency disadvantage in comparison to a capitally funded procedure. This finding was further developed in a number of subsequent studies.
Recently Sinn has turned to the problem of the global climate in an article "Public Policies against Global Warming" and in his book "Das grüne Paradoxon" (The Green Paradox). In these studies Sinn developed a supply-side theory of climate change by linking climate-theory approaches with the theory of exhaustible natural resources. The Green paradox that he has identified states that environmental policies that over time promote with increasing intensity substitute technologies and in the process lower the prices for fossil fuels will induce the resource suppliers to accelerate extraction, thus contributing to global warming.
With regard to long-term structural problems, Sinn is a proponent of supply-side positions. In 2005 he was one of the first German economists to sign the "Hamburger Appell", which argued for fundamental market-economy reforms and rejected demand-oriented concepts of economic policy. At the same time Sinn employs the instruments of Keynesian demand theory for his analyses of economic activity. With his studies on pension insurance, in which he argued for partial capital funding, as well as by providing direct advice to the Federal Ministry of Labour and Social Affairs (through CES, his university institute) and by contributing to an expertise on pensions for the Ministry of Economics, Sinn had a hand in the introduction of the "Riester-Rente", a privately financed pension scheme support by the German government in the form of grants and tax deductions.
In 2003 he 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.
Sinn has called the German economy a bazaar economy since 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 economy crisis is traced back by Sinn to an 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 American real-estate crisis. 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 world economic crisis, 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 processes (Selbststeuerung) inside an institutional framework provided by the state.
Sinn accuses the Greens of pursuing environmental protection policies with unsuitable means and of ignoring the economic laws of the European emissions trading system as well as the worldwide market for fossil fuel. In his book, The Green Paradox, he argues for including all countries of the world in a post-Kyoto, joint emissions trading system. He also favours employing a withholding tax on the yields of financial investments to curb the desire of the resource providers to extract more fossil fuels.
On October 26, 2008 in an interview with the Tagesspiegel about the 2008 financial crisis, Sinn drew a parallel between the current crisis and the Great Depression of 1929. During the course of the interview, Sinn characterized German business managers as scapegoats in the current crisis, whereas in 1929 the Jews were cast as scapegoats. Politicians from the Social Democratic Party of Germany and Green Party as well as bishop Margot Käßmann, economist Rudolf Hickel, and the Central Council of Jews in Germany sharply criticized Sinn's comment as equating manager criticism with the persecution of the Jews. Likewise, the German federal cabinet asked Sinn for a clarification. On the next day, Sinn apologized in an open letter, stating: "In no way did I mean to compare the fate of the Jews after 1933 to the current situation of German managers. Such a comparison would be absurd." The Simon Wiesenthal Center in Europe welcomed the swift apology. A number of Jewish economists and other scholars, including Nobel laureate Robert Solow, have defended Sinn and criticised the interpretation of his remark in the German press. Solow, in a letter to Sinn on 31 December 2008, remarked that this "simple statement" was "true, relevant and innocent". The Protestant theologian Richard Schröder, member of the German Ethical Council, wrote in a letter to the editor of the Tagesspiegel that he agreed absolutely with Sinn's much maligned remarks. Both letters are contained in a documentation prepared by the Ifo Institute.
