When market access gains do not spur urban growth

Marius Klein and Ferdinand Rauch

Journal of Economic Geography, 2024, vol. 24, issue 6, 907-919

Abstract: We revisit the natural experiments of division and unification of Germany. The negative shock to local market access following the division of Germany led to a fast and strong downward adjustment of the size of West German cities near the new border. In contrast, the positive shock of reunification did not lead to any change in their relative size. Even three decades after reunification, no convergence can be observed. We show that local subsidies to East Germany could have contributed to this asymmetry in time.

Keywords: market access; iron curtain; German reunification (search for similar items in EconPapers)
JEL-codes: F15 J61 N94 R12 (search for similar items in EconPapers)
Date: 2024
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