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Industrial Policy and the East German Productivity Puzzle
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Henning Klodt
Published/Copyright:
November 30, 2019
Abstract
Catching-up of East German productivity to West German levels has completely faded out since the mid-1990s. The remaining productivity gap cannot be attributed to an inferior capital endowment or qualification deficiencies of the East German labor force. Instead, it appears to be the result of an inappropriate design of industrial policy which concentrated on the subsidization of physical capital and largely ignored the advance of human capital- and service-intensive industrial structures. East Germany will have to face another wave of painful structural adjustment when capital-intensive industries are no longer protected from competition by public subsidies.
Published Online: 2019-11-30
Published in Print: 2000-08-01
© 2019 by Walter de Gruyter Berlin/Boston
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Articles in the same Issue
- Wages in the East German Transition Process: Facts and Explanations
- Catching-up of East German Labour Productivity in the 1990s
- EU Enlargement, Migration, and Lessons from German Unification
- Industrial Policy and the East German Productivity Puzzle
- Better LATE? Instrumental Variables Estimation of the Returns to Job Mobility during Transition
- Growth and Convergence in a Two-Region Model of Unified Germany
Articles in the same Issue
- Wages in the East German Transition Process: Facts and Explanations
- Catching-up of East German Labour Productivity in the 1990s
- EU Enlargement, Migration, and Lessons from German Unification
- Industrial Policy and the East German Productivity Puzzle
- Better LATE? Instrumental Variables Estimation of the Returns to Job Mobility during Transition
- Growth and Convergence in a Two-Region Model of Unified Germany
