Cyclical Adjustment, Capital-labor Substitution and Total Factor Productivity Convergence – East Germany After Unification

Smolny Werner ()
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Smolny Werner: Ludwig Erhard Chair, Faculty of Mathematics and Economics, Institute of Economic Policy, University of Ulm, 89069 Ulm, Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2012, vol. 232, issue 4, 445-459

Abstract: Despite rapid economic integration and massive help from the Federal Government East German productivity catching up faded out in the nineties. This paper presents panel-data estimates of the productivity adjustment based on a production function framework and a stylized adjustment model of the economy. The central empirical result is a decomposition of the sources of productivity growth. The estimates reveal that a large part of productivity growth in the early nineties is related to factors that were specific for that period. The fading out since the mid-nineties is attributed to the development of total factor productivity.

Keywords: Economics of transition; productivity convergence; Economics of transition; productivity convergence (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:232:y:2012:i:4:p:445-459

DOI: 10.1515/jbnst-2012-0405

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