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De-industrialization or re-industrialization? On the future of the Eastern German economy

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  • Schmidt, Klaus-Dieter
  • Naujoks, Petra

Abstract

The paper is intended to explore the prospective direction of structural adjustment in eastern Germany in the light of recent developments. The authors do argue that the Mezzogiorno-picture, a completely de-industrialized region between the Elbe- and the Oder-river, is not convincing. In the long-run, say in two decades, eastern Germany has good opportunities to become the most modern and competitive industrial basis in central Europe. In the medium-run, however, a dualization is likely - an industry with a rather new, highly capital-intensive segment and a subsidized old one. Consequently, there will emerge fast growing regions within Eastern Germany, so-called productivity islands, and regions with high chronical unemployment. This will be the unavoidable price for a very rapid equalization of real wages between east and west.

Suggested Citation

  • Schmidt, Klaus-Dieter & Naujoks, Petra, 1993. "De-industrialization or re-industrialization? On the future of the Eastern German economy," Kiel Working Papers 576, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:576
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    1. Paqué, Karl-Heinz & Soltwedel, Rüdiger & Schmieding, Holger & Hiemenz, Ulrich & Langhammer, Rolf J. & Klodt, Henning & Schrader, Jörg-Volker & Scheide, Joachim & Horn, Ernst-Jürgen & Paqué, Karl-Heinz, 1993. "Challenges ahead: Long-term perspectives of the German economy," Kiel Discussion Papers 202/203, Kiel Institute for the World Economy (IfW Kiel).
    2. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
    3. Siebert, Horst, 1990. "The economic integration of Germany," Kiel Discussion Papers 160, Kiel Institute for the World Economy (IfW Kiel).
    4. Siebert, Horst, 1990. "The economic integration of Germany – An update," Kiel Discussion Papers 160a, Kiel Institute for the World Economy (IfW Kiel).
    5. Bode, Eckhardt & Krieger-Boden, Christiane, 1990. "Sektorale Strukturprobleme und regionale Anpassungserfordernisse der Wirtschaft in den neuen Bundesländern," Open Access Publications from Kiel Institute for the World Economy 1453, Kiel Institute for the World Economy (IfW Kiel).
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    Cited by:

    1. Schmidt, Klaus-Dieter, 1997. "Corporate restructuring and export performance in the transition process: The case of Eastern Germany," Kiel Working Papers 845, Kiel Institute for the World Economy (IfW Kiel).

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