Catching Up with the West: The Achievements and Limitations of Creative Destruction

Thomas Lange and Geoff Pugh

Chapter 9 in East Germany’s Economic Development since Unification, 1998, pp 141-165 from Palgrave Macmillan

Abstract: Abstract Unification left eastern Germany with an acute imbalance between physical and human capital. A well-educated and trained workforce is a necessary condition for physical investment to generate sustained productivity growth. This is grounded in theory as well as the experience of South Korea and Taiwan where, since the 1960s, high investment promoted by public subsidy has powered growth and convergence with the developed market economies (Rodrik 1995, pp. 53, 96, 100). Accordingly, in eastern Germany a fundamental feature of transition strategy has been government support for investment — both directly in infrastructure and indirectly through financial incentives for the private sector.

Keywords: Productivity Growth; Capital Inflow; Labour Ratio; German Export; Manufacturing Output (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1007/978-1-349-14705-2_9

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