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Was Germany Ever United? Evidence from Intra- and International Trade 1885-1933

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Author Info
Nikolaus Wolf

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Abstract

This paper asks whether Germany was ever an economically integrated area. I explore thegeography of trade costs in a new data set of about 40,000 observations on regional tradeflows within and across the borders of Germany over the period 1885 - 1933. There are threekey results. First, the German Empire before 1914 was a poorly integrated economy, bothrelative to integration across the borders of the German state and internally. Second, thisinternal fragmentation had its origins in administrative borders within Germany, in ageographical barrier that divided Germany roughly along natural trade routes into east andwest, and in a considerable cultural heterogeneity within Germany prior to 1919. Third,internal integration improved along with external disintegration in the wake of the war, partlydue to border changes along the lines of ethno-linguistic heterogeneity and again with theGreat Depression. By the end of the Weimar Republic in 1933, Germany was reasonably wellintegrated.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0870.

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Date of creation: May 2008
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Handle: RePEc:cep:cepdps:dp0870

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Related research
Keywords: Aggregation Bias; Border Effects; Economic Integration; Germany;

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Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration
N13 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Europe: Pre-1913
N14 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Europe: 1913-
N90 - Economic History - - Regional and Urban History - - - General, International, or Comparative

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