We use the fall of the Berlin Wall in 1989 to show that personal relationships which individuals maintain for non-economic reasons can be an important determinant of regional economic growth. We show that West German households who have social ties to East Germany in 1989 experience a persistent...

Italy and Germany have similar geographical differences in productivity – North more productive than South in Italy; West more productive than East in Germany – but have adopted different models of wage bargaining. Italy sets wages based on nationwide contracts that allow for limited local...

Fifteen years after German reunification, the facts about slow regional convergence have born out the prediction of Barro (1991), except that migration out of East Germany has not slowed down. I document that in particular the 18-29 year old are leaving East Germany, and that the emigration has...

Preferences for redistribution, as well as the generosities of welfare states, differ significantly across countries. In this paper, we test whether there exists a feedback process of the economic regime on individual preferences. We exploit the quot;experimentquot; of German separation and...

We study the returns to apprenticeship and vocational training for three early labor market outcomes all measured at age 25 for East and West German youths: non-employment (i.e., unemployment or out of the labor force), permanent fulltime employment, and wages. We find strong positive effects of...

This paper advances the hypothesis that the EUS crisis was caused by German unification. The unification has implied a massive resource demand which parallels the US resource demand following Reagan's tax reforms in the eighties. The resource demand revised the German interest rates relative to...

The analogy between the economic problems of the Mezzogiorno region and East Germany has been initially contested by many authors. This paper argues that there are striking similarities in the two regions, in terms of the causes of their economic predicament. With an aggregate labour...

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...

The paper comments on the economic effects of the German unification. Apart from discussing the unification in an international perspective, analyzing the distributional consequences, and pointing to structural adjustment problems, it emphasizes the distinction between the frequently cited money...

Given shortages in public child care in Germany, this paper asks whether social support with child care and domestic work by spouses, kin and friends can facilitate mothers’ return to full-time or part-time positions within the first six years after birth. Using SOEP data from 1993-2009 and...