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Investment and employment adjustment after unification : some results from a macroeconometric disequilibrium model

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  • Radowski, Daniel
  • Smolny, Werner
  • Winker, Peter

Abstract

The macroeconomic development in West Germany in the aftermath of unification was characterized by a boom period in 1990/1991, a deep recession in 1992/1993 and a slow recovery since then. In East Germany, in contrast, unification induced a breakdown of production and employment followed by a slow recovery starting in 1992. In this paper, a macroeconometric model is used to assess this development. In particular, estimation results for investment and employment adjustment after unification are reported. The estimates are based on a disequilibrium model formerly developed for West Germany and extended in this paper to cover also unified Germany. The results reveal that the adjustment of investment and employment can be analysed with the same theoretical model for West and East Germany. However, the adjustment speed for investment differs significantly at least in the early years after unification, while changes in the mismatch on the labour market and employment adjustment are less pronounced. -- Die makroökonomischen Auswirkungen der Wiedervereinigung in Westdeutschland schlugen sich in einem exorbitanten Boom in den Jahren 1990/1991, einer tiefen Rezession in den Jahren 1992/1993 und einer darauffolgenden konjunkturellen Erholung nieder. In Ostdeutschland kam es dagegen zunächst zu einem Zusammenbruch der Produktion und einem rapiden Rückgang der Beschäftigung. Erst 1992 setzte dort der Prozess der wirtschaftlichen Erholung ein. In diesem Beitrag wird ein makroökonometrisches Modell zur Analyse dieser Entwicklung verwendet. Der Schwerpunkt liegt dabei auf den Anpassungsvorgängen bei Investitionen und Beschäftigung. Die Schätzungen basieren auf einem Ungleichgewichtsmodell, das für Westdeutschland entwickelt und nach der Wiedervereinigung auf Gesamtdeutschland ausgeweitet wurde. Als Ergebnis kann festgehalten werden, dass Investitionen und Beschäftigung für West- und Ostdeutschland auf der Grundlage des gleichen theoretischen Modells analysiert werden können. Während sich in den ersten Jahren nach der Wiedervereinigung in den Anpassungsgeschwindigkeiten der Investitionen signifikante Unterschiede zeigen, sind die Veränderungen beim Mismatch auf dem Arbeitsmarkt sowie die Anpassung der Beschäftigung weniger stark ausgeprägt.

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 99-56.

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Date of creation: 1999
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Handle: RePEc:zbw:zewdip:5269

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  1. Barro, Robert J, 1972. "A Theory of Monopolistic Price Adjustment," Review of Economic Studies, Wiley Blackwell, vol. 39(1), pages 17-26, January.
  2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  3. Robert E. Hall, 1986. "Market Structure and Macroeconomic Fluctuations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 285-338.
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Cited by:
  1. Beck, Martin & Winker, Peter, 2004. "Modeling spillovers and feedback of international trade in a disequilibrium framework," Economic Modelling, Elsevier, vol. 21(3), pages 445-470, May.
  2. Winker, Peter & Smolny, Werner & Radowski, Daniel, 1999. "Modeling German unification in a disequilibrium framework," ZEW Discussion Papers 99-61, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

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