Over the years, low wage and price increases in Germany amounted to a currency devaluation in real terms against the other eurozone countries and led to a continuous improvement in the German economy’s price competitiveness relative to its fellow eurozone members.

Regional convergence has emerged as a major topic during recent years. Several theoretical and empirical approaches have been developed which explain in what respect regions converge or diverge. Some have laid special emphasis on the role of migration. This paper applies these approaches to...