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Although the costs associated with moving an antiquated socialist economy toward its capitalist counterpart was anticipated to be significant, German industrial efficiency was expected to quickly overcome any challenges. Things turned out rather differently. Conventional wisdom blamed poor...
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experiment. We analyze whether the slow-down in convergence in per capita income between East and West Germany since the mid-1990 …s and the lower international openness of East Germany are linked. We address the endogeneity of openness by adapting …
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