Article
East Germany's Transitional Economy
Challenge
(1994)
Abstract
The article analyses the prospects of economic growth in East Germany after its transition to a market economy. The author remarks that one significant result of unification is that some East German families are benefiting from rising family incomes and enjoying substantial increases in their bundle of consumer goods with greater choice, despite the difficult problem. After four years of unification, some economic indicators look promising. Labor productivity in industry increased from an estimated 30 percent of the West German level at the start of unification to 50 percent in 1994. Prior to the start of German unification in 1990, the methods used to transfer funds from West to East, and the ways in which goods flowed from East to West, were many. West Germans imported established product lines from East Germany. With respect to types of products and their quality, these must have contributed something to the utility maximization of the discerning West German consumers, and to the profit maximization of competitive West German firms.
Keywords
- East Germany -- economy
Disciplines
Publication Date
September, 1994
DOI
10.1080/05775132.1994.11471768
Publisher Statement
Copyright of Challenge is the property of Taylor & Francis Ltd
Citation Information
Hall, J., & Ludwig, U. (1994). East Germany's transitional economy. Challenge, 37(5), 26.