This paper assembles and reviews data on growth performance for East Germany. Conclusions are only tentative, as data reliability is still poor. Examining factor growth and total factor productivity performance, the paper arrives at three main conclusions. First, large-scale dismantling of capital by the Soviets was outweighed by migration, such that the aggregate capital-labour ratio in East Germany around 1950 was similar to that of West Germany. Second, the record of productivity growth follows the common pattern for Western countries. The productivity slowdown set in with a delay, however, as foreign borrowing and subsidized oil imports isolated East Germany from the first oil shock. Third, when these subsidies ended and debt service mounted, East Germany ran into a debt crisis, with productivity growth becoming zero or even negative in the 1980s.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
984.
Find related papers by JEL classification: N1 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations N4 - Economic History - - Government, War, Law, and Regulation O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies P3 - Economic Systems - - Socialist Institutions and Their Transitions
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