Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/17724 
Year of Publication: 
2001
Series/Report no.: 
Kiel Working Paper No. 1045
Publisher: 
Kiel Institute of World Economics (IfW), Kiel
Abstract: 
Analysis in terms of the two-sector open economy shows that in bringing the market economy to East Germany, West Germany seems to have disregarded important fundamentals. Premature formation of a currency union led to a substantial real appreciation of the East German currency. Premature implementation of the West German system of wage bargaining resulted in inappropriate minimum wage schedules. Both measures made East German production possibilities and employment decline.
Subjects: 
Minimum Wages
Employment
German Unification
JEL: 
P23
E24
Document Type: 
Working Paper

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