An Exercise in Futility: East German Economic Growth and Decline, 1945-89
Abstract
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.Download Info
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 984.
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Date of creation: Jul 1994
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Handle: RePEc:cpr:ceprdp:984
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Related research
Keywords: Autarky; Comparative Productivity; East Germany; Economic Transition; Socialist Planning;Find related papers by JEL classification:
- N1 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations
- N4 - Economic History - - Government, War, Law, International Relations, and Regulation
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
- P3 - Economic Systems - - Socialist Institutions and Their Transitions
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Crafts, Nicholas & Toniolo, Gianni, 2008. "European Economic Growth, 1950-2005: An Overview," CEPR Discussion Papers 6863, C.E.P.R. Discussion Papers.
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