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Cyclical Adjustment, Capital-labor Substitution and Total Factor Productivity Convergence – East Germany After Unification

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  • Werner Smolny

    ()
    (Universitaet Ulm)

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    Abstract

    Despite rapid economic integration and massive help from the Federal Government East German productivity catching up faded out in the nineties. This paper presents panel-data estimates of the productivity adjustment based on a production function framework and a stylized adjustment model of the economy. The central empirical result is a decomposition of the sources of productivity growth. The estimates reveal that a large part of productivity growth in the early nineties is related to factors that were specific for that period. The fading out since the mid-nineties is attributed to the development of total factor productivity.

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    Bibliographic Info

    Article provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.

    Volume (Year): 232 (2012)
    Issue (Month): 4 (July)
    Pages: 445-459

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    Handle: RePEc:jns:jbstat:v:232:y:2012:i:4:p:445-459

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    Related research

    Keywords: Economics of transition; productivity convergence;

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    References

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