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Brenke, Karl [Author]; Fratzscher, Marcel [Author]; Grabka, Markus M. [Author]; Holst, Elke [Author]; Hülle, Sebastian [Author]; Liebig, Stefan [Author]; Priem, Maximilian [Author]; Rasner, Anika [Author]; Schober, Pia S. [Author]; Schupp, Jürgen [Author]; Stahl, Juliane F. [Author]; Wieber, Anna [Author]

Reunification: An economic success story

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  • Media type: E-Article
  • Title: Reunification: An economic success story
  • Contributor: Brenke, Karl [Author]; Fratzscher, Marcel [Author]; Grabka, Markus M. [Author]; Holst, Elke [Author]; Hülle, Sebastian [Author]; Liebig, Stefan [Author]; Priem, Maximilian [Author]; Rasner, Anika [Author]; Schober, Pia S. [Author]; Schupp, Jürgen [Author]; Stahl, Juliane F. [Author]; Wieber, Anna [Author]
  • imprint: Berlin: Deutsches Institut für Wirtschaftsforschung (DIW), 2014
  • Language: English
  • ISSN: 2192-7219
  • Origination:
  • Footnote: Diese Datenquelle enthält auch Bestandsnachweise, die nicht zu einem Volltext führen.
  • Description: People's expectations after the fall of the Berlin Wall 25 years ago and of reunification in 1990 were huge. The government promised to create "flourishing landscapes" within a few years. The euphoria of reunification came not only through the desire to finally become one country and one nation again but also had tangible economic reasons: the people from East Germany wanted better economic prospects, more opportunities to realize their potential, and ultimately to create more well-being for themselves and future generations. West Germans were hoping for a boom. This promise very quickly proved to be an illusion. And, solely from an economic perspective, economic policy errors were made, such as monetary union at an exchange rate that caused East Germany's economic competitiveness to fall rapidly and, at least initially, contributed to a sharp rise in unemployment. In addition, privatization through the Treuhandanstalt was probably premature. Nevertheless, did reunification fail from an economic policy perspective? It would be misguided to take the political promises of whirlwind prosperity as a measure of the success of reunification. It is difficult to answer the question as to what are realistic objectives and criteria for a systematic economic policy evaluation of reunification. The convergence of living conditions in eastern and western Germany is a measure that comes close to assessing this objective. It would be misleading, however, to equate convergence with complete equality of all economic indicators. Equality of income, productivity, or assets will never be achieved in any economy or country. There will always be differences between regions, and even within regions, in any small or highly integrated country. The different regions in western Germany have not undergone this process since 1945, which would have led to full economic convergence, had the country not been divided. Quite the contrary: there are often temporary divergences, i.e., diverging living and economic conditions, sometimes relatively ...
  • Access State: Open Access