Discussion Paper Details

Please find the details for DP5015 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Costs of Remoteness: Evidence from German Division and Reunification

Author(s): Stephen J. Redding and Daniel M Sturm

Publication Date: April 2005

Keyword(s): economic geography, german division, german reunification and market access

Programme Area(s): International Trade and Regional Economics

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 war related destruction. Finally, we also find some first evidence of a recovery of the border cities after the reunification of East and West Germany.

For full details and related downloads, please visit:

Bibliographic Reference

Redding, S and Sturm, D. 2005. 'The Costs of Remoteness: Evidence from German Division and Reunification'. London, Centre for Economic Policy Research.