Support of agriculture is justified, among others, by its contribution to rural economic development. Nevertheless, the relation between agricultural and general economic development may be ambiguous. On the one side, agriculture may affect other sectors positively via multiplier and income...

Some rural regions in Western Germany have experienced a very positive economic development in terms of employment and incomes in the past decade. This development, however, is in sharp contrast to the the enduring economic lag of many rural regions in Eastern Germany. This paper seeks to find...