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Sectoral Adjustments in Eastern Germany Due to Market Forces

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  • Paarlberg, Philip L

Abstract

Some characteristics of the eastern German economy are analyzed as to their effects on the adjustment to market forces, using a modified Ricardo-Viner model. Included are transfer payments, EC farm policy, wage policy, and currency overvaluation. The analysis shows that the adjustments for a sector cannot be understood solely in terms of developments in that sector alone. The wage policy and the Currency conversion magnified the adjustments in agriculture. Agricultural policy dampened in the decline in agricultural output and had positive spillover effects on nontraded goods. Such interconnections must be kept in mind when analyzing the reform process. Copyright 1994 by Blackwell Publishing Ltd.

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  • Paarlberg, Philip L, 1994. "Sectoral Adjustments in Eastern Germany Due to Market Forces," Review of International Economics, Wiley Blackwell, vol. 2(2), pages 112-122, June.
    • Handle: RePEc:bla:reviec:v:2:y:1994:i:2:p:112-22
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    1. Paarlberg, Philip L., 1997. "Agricultural Transformation in the New Federal States of Germany," 1997: Economic Transition in Central and East Europe, and the Former Soviet Union: Implications ... Symposium, June 12-14, 1997, Berlin, Germany 50846, International Agricultural Trade Research Consortium.

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