Gunnar Myrdal and the Persistence of Germany's Regional Inequality

John Hall and Udo Ludwig

Journal of Economic Issues, 2009, vol. 43, issue 2, 345-352

Abstract: This paper seeks to establish that contributions to regional theory advanced by Gunnar Myrdal exhibit high levels of explanatory power when clarifying challenges facing Germany's eastern region since the fall of the Berlin Wall. Myrdal's evolutionary institutionalist contribution is contrasted with the "convergence hypothesis" advanced by R. Barro and X. Sala-i-Martin. Challenged is their prediction that Germany's eastern region would experience relatively higher annual rates of per capita output growth, and that levels of per capita output would converge between the eastern and western regions over time. Myrdal's approach is argued superior as it allows for considering backwash and spread effects within a framework of circular and cumulative causation, emerging between Germany's western and eastern regions.

Date: 2009
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DOI: 10.2753/JEI0021-3624430207

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