This paper examines data on trade flows between West German Bundeslander (federal states) and East Germany to explore the effect of national borders on trade. Although the data covers only a small fraction of intra-German trade flows, I find a home bias of about factor 2.2; West German shipments...

Nearly 25 years after the German reunification, vastly different living conditions between East and West Germany still remain. This is particularly true for the distribution of net wealth which is of special importance for the well-being of individuals. Wealth provides utility in a number of...