Economics of German Unification

Following German reunification in 1990, East Germany's centrally planned economy was abolished and replaced by West Germany's social market economy. Western Germany has since provided vast financial support to aid the transformation, and enable eastern Germany to catch-up with western Germany's productivity and living standards. This book evaluates the main events and their outcomes since mid-1990 and the associated policy issues. The authors assess the medium to long term growth prospects of eastern Germany and the wider implications for western Germany and Europe.The Economics of German Unification analyses the economic process of assimilating eastern Germany into the institutions and performance levels of western Germany. It includes original research as well as providing an overview of existing literature. Among the topics discussed are:the relative backwardness of East Germany's economythe impact of monetary and economic integrationrestructuring and privatization<>li>labour market and industrial policy, including an analysis of wage restraint and cost reductionthe prospects for eastern Germany catching-up economically with western Germanythe repercussions for German competitiveness nationally and within the wider European contextThis book will be welcomed by academics, researchers and undergraduates interested in the economics of transition, comparative economic systems, political economy and the European business environment.