We develop a model of firm learning in volatile markets with noisy signals and test its predictions using historical data from the Ifo Institute's Business Climate Survey. We find that firms' forecasts improve as they age. We also exploit German Reunification as a natural experiment where firms...

A political miracle occurred when Germany was reunited, and at first glance an economic miracle has followed. Real incomes in the east have now reached the western level, and investment per capita has been much higher than in the west. However, every third deutschmark spent in the east has been...

This paper develops a large-scale, dynamic life-cycle model to simulate Russia's demographic and fiscal transition under favorable and unfavorable fossil-fuel price regimes. The model includes Russia, the U.S., China, India, the EU, and Japan+ (Japan plus Korea). The model predicts dramatic...

Since monetary union with western Germany on 1 July 1990, eastern female monthly wages have risen by 10 percentage points relative to male wages, but female employment has fallen 5 percentage points more than male employment. Using the German Socio-Economic Panel to study the years 1990-1994, I...

Transition in Central Europe is four years old. State firms which dominated the economy are struggling with market forces. A new private sector quickly emerged and has taken hold. Unemployment, which did not exist, is high and still increasing. Will this process of transition accelerate, or slow...