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The costs of remoteness: evidence from German division and reunification

Redding, Stephen J. and Sturm, Daniel M. ORCID: 0000-0001-6408-8089 (2008) The costs of remoteness: evidence from German division and reunification. American Economic Review, 98 (5). pp. 1766-1797. ISSN 0002-8282

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Identification Number: 10.1257/aer.98.5.1766


This paper exploits the division of Germany after the Second World War and the reunification of East and West Germany in 1990 as a natural experiment to provide evidence for the importance of market access for economic development. In line with a standard new economic geography model, we find that, following division, cities in West Germany close to the East-West German border experienced a substantial decline in population growth relative to other West German cities. We show that the model can account for the quantitative magnitude of our findings and provide additional evidence against alternative possible explanations.

Item Type: Article
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Additional Information: © 2008 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
JEL classification: F - International Economics > F1 - Trade > F15 - Economic Integration
N - Economic History > N9 - Regional and Urban History > N94 - Europe: 1913-
R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade
R - Urban, Rural, and Regional Economics > R2 - Household Analysis > R23 - Regional Migration; Regional Labor Markets; Population
Date Deposited: 05 Apr 2011 15:01
Last Modified: 20 Oct 2021 23:10

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