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Institut für Weltwirtschaft (IfW), Kiel >
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http://hdl.handle.net/10419/17834
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| Title: | | What kind of shock was it? : Regional integration and structural change in Germany after unification  |
| Authors: | | Burda, Michael C. |
| Issue Date: | | 2007 |
| Series/Report no.: | | Kieler Arbeitspapiere 1306 |
| Abstract: | | Eastern Germany?s recovery from the ?unification shock? has been characterized by deep structural change – with apparent repercussions for the West as well – and an integration process involving both capital deepening (extensive and intensive investment) and labor thinning (net out-migration). I propose a constant-returns neoclassical model of economic integration which can account for these facts. Adjustment costs determine dynamics and steady state regional distribution of production factors. The model also explains persistent wage and capital rate-of-return differentials along the equilibrium path. Under competitive conditions, observed factor price differentials contain information on those adjustment costs. |
| Subjects: | | German reunification regional integration costs of adjustment capital mobility migration |
| JEL: | | J61 P23 F2 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Kieler Arbeitspapiere, IfW
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