Research report

Regional economic integration and factor mobility in unified Germany

BP2-STS

    23.09.2015

37

English The massive movement of capital and labor in opposite directions is the most striking characteristic of economic integration of Eastern and Western Germany. Beyond that, wage-setting behavior during the early years of unification and massive public social transfers have affected the transition path of the Eastern economy. In this paper, I set up a two-region open economy model with capital and labor mobility, wage-setting behavior, and public social transfers to explain major empirical trends of the German integration episode. I show that the model is able to replicate aggregate migration pattern in unified Germany and that wage-setting behavior has delayed labor productivity convergence between both German regions, whereas public social transfers have reduced the effect of wage setting on East-West net migration.
Collections
Faculty
Faculté des sciences économiques et sociales et du management
Language
  • English
Classification
Economics
Series statement
  • Working Papers SES ; 463
License
License undefined
Identifiers
  • RERO DOC 257529
  • RERO R008298286
Persistent URL
https://folia.unifr.ch/unifr/documents/304774
Statistics

Document views: 36 File downloads:
  • WP_SES_463.pdf: 33