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The costs of remoteness: evidence from German division and reunification

Redding, Stephen and Sturm, Daniel M. (2005) The costs of remoteness: evidence from German division and reunification. CEP Discussion Papers (CEPDP0688). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

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 of 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 that were close to the new border between East and West Germany experienced a substantial decline in population growth relative to other West German cities. We provide several pieces of evidence that the decline of the border cities can be entirely accounted for by their loss in market access and is neither driven by differences in industrial structure nor differences in the degree of warrelated destruction. Finally, we also find some first evidence of a recovery of the border cities after the re-unification of East and West Germany.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2005 The Authors
Divisions: Centre for Economic Performance
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-
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Regional, Urban, and Rural Analyses
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 09 Aug 2013 11:22
Last Modified: 14 Aug 2019 23:40
URI: http://eprints.lse.ac.uk/id/eprint/51613

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