What kind of shock was it? Regional integration and structural change in Germany after unification

Michael Christopher Burda ()

Journal of Comparative Economics, 2008, vol. 36, issue 4, pages 557-567

Abstract: Eastern Germany's recovery from its unification shock has been accompanied by deep structural change and a mobility race--a regional integration process involving both capital deepening and labor thinning (outmigration). A constant-returns neoclassical model of economic integration is proposed to account for these facts. Adjustment costs and initial conditions 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 these conditions, observed factor price differentials contain information on those adjustment costs. Journal of Comparative Economics 36 (4) (2008) 557-567.

Keywords: German; reunification; Regional; integration; Costs; of; adjustment; Capital; mobility; Migration (search for similar items in EconPapers)
Date: 2008

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Related works:
Working Paper: What kind of shock was it? Regional Integration and Structural Change in Germany after Unification (2007)
Working Paper: What kind of shock was it? Regional Integration and Structural Change in Germany after Unification (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:eee:jcecon:v:36:y:2008:i:4:p:557-567

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