The former German chancellor Helmut Schmidt holds that despite the huge transfers from West to East Germany the East German economy does not take off as it was widely expected. We argue it is not despite these transfers but because of them. Building on the common features of the extension of the...

In their introduction to the special issue of the Review of Economic Dynamics on "Great Depressions of the 20th Century" (Vol. 5, 2002), Timothy J. Kehoe and Edward C. Prescott argue that in the last few years "great depressions" have hit two rich countries: New Zealand and Switzerland. We...