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Was Germany ever united? Evidence from Intra- and International Trade 1885 – 1933

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  • Wolf, Nikolaus

    (The University of Warwick, CEPR and CESifo)

Abstract

When did Germany become economically integrated? Within the framework of a gravity model, based on a new data set of about 40,000 observations on trade flows within and across the borders of Germany over the period 1885 – 1933, I explore the geography of trade costs across Central Europe. There are three key results. First, the German Empire before 1914 was a poorly integrated economy, both relative to integration across the borders of the German state and in absolute terms. Second, this internal fragmentation resulted from cultural heterogeneity, from administrative borders within Germany, and from geographical barriers that divided Germany along natural trade routes into eastern and western parts. Third, internal integration improved, while external integration worsened after World War I and again with the Great Depression, in part because of border changes along the lines of ethno-linguistic heterogeneity. By the end of the Weimar Republic in 1933, Germany was reasonably well integrated.

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Bibliographic Info

Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 871.

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Length: 55 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:wrk:warwec:871

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

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  1. Volker Nitsch & Nikolaus Wolf, 2013. "Tear down this wall: on the persistence of borders in trade," Canadian Journal of Economics, Canadian Economics Association, vol. 46(1), pages 154-179, February.
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Citations

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Cited by:
  1. Crafts, Nicholas & Klein, Alexander, 2013. "Geography and Intra-National Home Bias: U. S. Domestic Trade in 1949 and 2007," CEPR Discussion Papers 9309, C.E.P.R. Discussion Papers.
  2. Möhlmann, Axel, 2013. "Persistence or Convergence? The East-West Tax Morale Gap in Germany," MPRA Paper 50766, University Library of Munich, Germany, revised 27 Jul 2013.
  3. Friehe, Tim & Mechtel, Mario, 2014. "Conspicuous consumption and political regimes: Evidence from East and West Germany," European Economic Review, Elsevier, vol. 67(C), pages 62-81.
  4. Nitsch, Volker & Wolf, Nikolaus, 2009. "Tear Down this Wall : On the Persistence of Borders in Trade," The Warwick Economics Research Paper Series (TWERPS) 919, University of Warwick, Department of Economics.
  5. Cletus C. Coughlin & Dennis Novy, . "Is the International Border Effect Larger than the Domestic Border Effect? Evidence from U.S. Trade," Discussion Papers 09/29, University of Nottingham, GEP.
  6. repec:cge:warwcg:111 is not listed on IDEAS
  7. Daniel Tirado & Marc Badia-Miró, 2012. "Economic integration and regional inequality in Iberia (1900-2000) : a geographical approach," Working Papers in Economic History wp12-03, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
  8. Wahl, Fabian, 2013. "Does medieval trade still matter? Historical trade centers, agglomeration and contemporary economic development," FZID Discussion Papers 82-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  9. Kopsidis, Michael & Wolf, Nikolaus, 2012. "Agricultural Productivity Across Prussia During the Industrial Revolution: A Thünen Perspective," The Journal of Economic History, Cambridge University Press, vol. 72(03), pages 634-670, September.
  10. Giovanni Federico & Antonio Tena Junguito, 2013. "The ripples of the Industrial revolution: exports, economic growth and regional integration in Italy in the early 19th century," Working Papers in Economic History wp13-02, Universidad Carlos III, Departamento de Historia Económica e Instituciones.

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