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De-industrialization or re-industrialization? On the future of the Eastern German economy

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  • Schmidt, Klaus-Dieter
  • Naujoks, Petra

Abstract

The paper is intended to explore the prospective direction of structural adjustment in eastern Germany in the light of recent developments. The authors do argue that the Mezzogiorno-picture, a completely de-industrialized region between the Elbe- and the Oder-river, is not convincing. In the long-run, say in two decades, eastern Germany has good opportunities to become the most modern and competitive industrial basis in central Europe. In the medium-run, however, a dualization is likely - an industry with a rather new, highly capital-intensive segment and a subsidized old one. Consequently, there will emerge fast growing regions within Eastern Germany, so-called productivity islands, and regions with high chronical unemployment. This will be the unavoidable price for a very rapid equalization of real wages between east and west.

Suggested Citation

  • Schmidt, Klaus-Dieter & Naujoks, Petra, 1993. "De-industrialization or re-industrialization? On the future of the Eastern German economy," Kiel Working Papers 576, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:576
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    References listed on IDEAS

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    1. Siebert, Horst, 1990. "The economic integration of Germany – An update," Kiel Discussion Papers 160a, Kiel Institute for the World Economy (IfW Kiel).
    2. Bode, Eckhardt & Krieger-Boden, Christiane, 1990. "Sektorale Strukturprobleme und regionale Anpassungserfordernisse der Wirtschaft in den neuen Bundesländern," Open Access Publications from Kiel Institute for the World Economy 1453, Kiel Institute for the World Economy (IfW Kiel).
    3. Paqué, Karl-Heinz & Soltwedel, Rüdiger & Schmieding, Holger & Hiemenz, Ulrich & Langhammer, Rolf J. & Klodt, Henning & Schrader, Jörg-Volker & Scheide, Joachim & Horn, Ernst-Jürgen & Paqué, Karl-Heinz, 1993. "Challenges ahead: Long-term perspectives of the German economy," Kiel Discussion Papers 202/203, Kiel Institute for the World Economy (IfW Kiel).
    4. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
    5. Siebert, Horst, 1990. "The economic integration of Germany," Kiel Discussion Papers 160, Kiel Institute for the World Economy (IfW Kiel).
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    Cited by:

    1. Schmidt, Klaus-Dieter, 1997. "Corporate restructuring and export performance in the transition process: The case of Eastern Germany," Kiel Working Papers 845, Kiel Institute for the World Economy (IfW Kiel).

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