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Market Access and the Arrow of Time

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  • Marius Klein
  • Ferdinand Rauch

Abstract

We revisit the natural experiments of division and unification of Germany now that more time has passed and more data have become available. We show that local market access shocks are not symmetric in time. The negative shock to local market access following the division of Germany lead to a fast and strong downward adjustment of the size of West-German cities near the new border. In contrast, the positive shock of reunification did not lead to any change in their relative size, even three decades after the German reunification.

Suggested Citation

  • Marius Klein & Ferdinand Rauch, 2023. "Market Access and the Arrow of Time," CESifo Working Paper Series 10279, CESifo.
    • Handle: RePEc:ces:ceswps:_10279
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    More about this item

    Keywords

    market access; iron curtain;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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