The costs of remoteness: Evidence from German division and reunification

Stephen J. Redding, Daniel M. Sturm

Research output: Contribution to journalArticlepeer-review

284 Scopus citations

Abstract

This paper exploits the division of Germany after the Second World War and the reunification of East and West Germany in 1990 as a natural experiment to provide evidence for the importance of market access for economic development. In line with a standard new economic geography model, we find that, following division, cities in West Germany close to the East-West German border experienced a substantial decline in population growth relative to other West German cities. We show that the model can account for the quantitative magnitude of our findings and provide additional evidence against alternative possible explanations.

Original languageEnglish (US)
Pages (from-to)1766-1797
Number of pages32
JournalAmerican Economic Review
Volume98
Issue number5
DOIs
StatePublished - Dec 2008
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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