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Was Germany Ever United? Evidence from Intra- and International Trade, 1885 -1933

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  • Wolf, Nikolaus

Abstract

This paper asks whether Germany was ever an economically integrated area. I explore the geography of trade costs in a new data set of about 40,000 observations on regional trade flows within and across the borders of Germany over the period 1885 – 1933. 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 internally. Second, this internal fragmentation had its origins in administrative borders within Germany, in a geographical barrier that divided Germany roughly along natural trade routes into east and west, and in a considerable cultural heterogeneity within Germany prior to 1919. Third, internal integration improved along with external disintegration in the wake of the war, partly due to border changes along the lines of ethno-linguistic heterogeneity and again with the Great Depression. By the end of the Weimar Republic in 1933, Germany was reasonably well integrated.

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  • Wolf, Nikolaus, 2008. "Was Germany Ever United? Evidence from Intra- and International Trade, 1885 -1933," CEPR Discussion Papers 6796, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:6796
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    Cited by:

    1. Volker Nitsch & Nikolaus Wolf, 2013. "Tear down this wall: on the persistence of borders in trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(1), pages 154-179, February.
    2. Tirado, Daniel A. & Badia-Miró, Marc, 2012. "Economic integration and regional inequality in Iberia (1900-2000) : a geographical approach," IFCS - Working Papers in Economic History.WH wp12-03, Universidad Carlos III de Madrid. Instituto Figuerola.
    3. Kaukin, Andrei & Idrisov, Georgij, 2013. "The gravity model of foreign trade in Russia: the case of a large area of the country with the longest border," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 133-145, August.

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    More about this item

    Keywords

    aggregation bias; border effects; economic integration; Germany;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N90 - Economic History - - Regional and Urban History - - - General, International, or Comparative

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