Advanced Search
MyIDEAS: Login to save this paper or follow this series

Transfers, agglomeration and German unification


Author Info

  • Ross, Matthias
Registered author(s):


    This paper analyses in the framework of a 2-region economic geography model the impact of transfers on agglomeration of economic activity. Two main results can be derived: First, subsidies to the activity of firms are more efficient to avoid agglomeration than subsidies to consumers (social policy). Second, if a less developed region starts its catch up process first increasing and afterwards decreasing transfers are necessary to avoid agglomeration. Due to these results east Germany?s slowdown of convergence may be a consequence of too less transfers and especially too less firm subsidies. Furthermore, if east Germany locates still at the first stage of convergence even increasing transfers would be necessary to guarantee convergence. -- Im Rahmen eines 2-Regionen Modells der ?ökonomischen Geographie? wird der Einfluss von Transfers auf die Konzentration wirtschaftlicher Aktivität untersucht. Zwei entscheidende Ergebnisse ergeben sich aus dem theoretischen Modell: Erstens sind Transfers, die für die Subventionierung von Unternehmen verwendet werden, wirkungsvoller als sozialpolitisch motivierte Transfers. Zweitens kann der Anpassungsprozeß einer geringer entwickelten Region in zwei Phasen eingeteilt werden, wobei während der ersten Phase zunehmende und während der zweiten Phase abnehmende Transfers erforderlich sind, um Einkommenskonvergenz zu gewährleisten. Im Lichte dieser theoretischen Ergebnisse können in der Konstanz der Transfers in die neuen deutschen Bundesländer und in der gleichzeitigen Abnahme der Unternehmenssubventionen weitere Erklärungen der mangelnden Einkommenskonvergenz gesehen werden. Befinden sich die neuen Bundesländer noch in der ersten Phase des Anpassungsprozesses, dann wären sogar steigende Transfers notwendig, um Konvergenz zu garantieren.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Download Restriction: no

    Bibliographic Info

    Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 144.

    as in new window
    Date of creation: 2001
    Date of revision:
    Handle: RePEc:zbw:hwwadp:26161

    Contact details of provider:
    Postal: Neuer Jungfernstieg 21, D-20347 Hamburg
    Phone: 0049-40-42834-0
    Fax: 0049-40-42834-451
    Web page:
    More information through EDIRC

    Related research

    Keywords: economic geography; economic integration; transfers; tax policy; east Germany;

    Find related papers by JEL classification:


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Baldwin, Richard & Krugman, Paul, 2000. "Agglomeration, Integration and Tax Harmonization," CEPR Discussion Papers 2630, C.E.P.R. Discussion Papers.
    2. Hans-Werner Sinn, 2000. "Germany's Economic Unification: An Assessment after Ten Years," NBER Working Papers 7586, National Bureau of Economic Research, Inc.
    3. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9780521171960.
    4. Martin, Philippe, 1998. "Public Policies, Regional Inequalities and Growth," CEPR Discussion Papers 1841, C.E.P.R. Discussion Papers.
    5. Ottaviano, G.I.P., 1999. "Ad Usum Delphini: a Primer in 'New Economic Geography'," Economics Working Papers eco99/28, European University Institute.
    6. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Cristobal, Adolfo, 2007. "Trade and migration: a U-shaped transition in Eastern Europe," MPRA Paper 3446, University Library of Munich, Germany.


    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:zbw:hwwadp:26161. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.