Ravn, MO; Canova, F; (2000) The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State. Review of Economic Dynamics , 3 (3) 423 - 460.
Full text not available from this repository.
We study the effects of German unification in a model with capital accumulation, skill differences, and a welfare state. We argue that this event is similar to a mass migration of low-skilled agents holding no capital into a foreign country. Absent a welfare state, we observe an investment boom, depressed output, and employment conditions. Capital owners and high-skilled agents are willing to give up to 4% of per-capita consumption to favor unification. When a welfare state exists the investment boom disappears and the recession is prolonged. Now, with unification, capital owners and high-skilled agents lose 4% of per-capita consumption. Journal of Economic Literature Classification Numbers: E32, E62, F22, H23. © 2000 Academic Press.
|Title:||The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State|
|UCL classification:||UCL > School of Arts and Social Sciences > Faculty of Social and Historical Sciences > Economics|
Archive Staff Only: edit this record