The Distributional Impact of Unification and the 1992-93 Recession on West German Households

Posted: 7 Jun 2003

See all articles by John A. Bishop

John A. Bishop

East Carolina University - College of Business

Lester A. Zeager

East Carolina University - Department of Economics

Abstract

The 1992-93 recession in the western states of Germany has been attributed, in substantial measure, to the macroeconomic consequences of policies to finance unification. Studies of the costs of unification have not attempted to measure the burden of the recession. We estimate a dynamic, panel model of household incomes using data from the German Socio-Economic Panel (GSOEP) and use it to forecast what these incomes would have been in 1992-94 without a recession. Using a ratio of actual to forecast incomes, we compare the relative burden of the recession across households. Our findings suggest that western households below the median income bore the brunt of the combined impact of unification and the recession of 1992-93.

JEL Classification: P3, D3, E3

Suggested Citation

Bishop, John A. and Zeager, Lester, The Distributional Impact of Unification and the 1992-93 Recession on West German Households. Available at SSRN: https://ssrn.com/abstract=273148

John A. Bishop (Contact Author)

East Carolina University - College of Business ( email )

Department of Economics
Greenville, NC 27858-4353
United States

Lester Zeager

East Carolina University - Department of Economics ( email )

Brewster Building
Greenville, NC 27858
United States
252-328-6408 (Phone)
252-328-6743 (Fax)

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