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New Economic Geography and Reunified Germany at Twenty: A Fruitful Match?

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  • Frank Bickenbach
  • Eckhardt Bode

Abstract

We qualitatively match new economic geography (NEG) to stylized facts on German economic integration after 1989. We find that NEG may explain German integration reasonably well. Germany may currently be close to the peak of the bell curve, which describes the long-run relationship between integration and agglomeration in Germany. As a consequence, further economic integration between the two parts of Germany may eventually foster redispersion of economic activity toward East Germany. We also identify limitations of NEG for explaining German integration, most notably the analytical complexity of multi-region models and its neglect of knowledge spillovers and labour pooling.

Suggested Citation

  • Frank Bickenbach & Eckhardt Bode, 2013. "New Economic Geography and Reunified Germany at Twenty: A Fruitful Match?," Spatial Economic Analysis, Taylor & Francis Journals, vol. 8(2), pages 120-153, June.
    • Handle: RePEc:taf:specan:v:8:y:2013:i:2:p:120-153
    DOI: 10.1080/17421772.2012.760132
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    1. Fuchs, Michaela & Wesling, Mirko & Weyh, Antje, 2014. "Potenzialnutzung in Ostdeutschland : eine Analyse von Angebot und Nachfrage auf dem Arbeitsmarkt," IAB-Forschungsbericht 201406, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Krenz, Astrid, 2016. "Agglomeration of knowledge in the German regional economy," University of Göttingen Working Papers in Economics 277, University of Goettingen, Department of Economics.
    3. Franz-Josef Bade & Eckhardt Bode & Eleonora Cutrini, 2015. "Spatial fragmentation of industries by functions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(1), pages 215-250, January.
    4. Fritzsche, Birgit & Fuchs, Michaela & Orth, Anja Katrin & Sujata, Uwe & Weyh, Antje, 2015. "Potenzialnutzung in Sachsen, Sachsen-Anhalt und Thüringen : eine Analyse von Angebot und Nachfrage auf dem Arbeitsmarkt," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Sachsen-Anhalt-Thüringen 201501, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Ahmad, Omar Martin & Weyh, Antje, 2015. "Rückwanderung von Beschäftigten nach Sachsen : eine Analyse anhand der Beschäftigten-Historik des IAB," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Sachsen 201502, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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