International Implications of German Unification

CES Working Paper Number 117

Posted: 5 Dec 1996

See all articles by Hans-Werner Sinn

Hans-Werner Sinn

CESifo (Center for Economic Studies and Ifo Institute); National Bureau of Economic Research (NBER); Ludwig Maximilian University of Munich (LMU)

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Date Written: October 1996

Abstract

This paper advances the hypothesis that the EMS crisis was caused by German unification. The unification has implied a massive resource demand which parallels the U.S. resource demand following Reagan's tax reforms in the eighties. The resource demand revised the German interest rates relative to the rest of the world, which brought about devaluations of other European currencies. The paper identifies those European currencies needing revaluation before they can join the European Currency Union.

JEL Classification: F33

Suggested Citation

Sinn, Hans-Werner, International Implications of German Unification (October 1996). CES Working Paper Number 117, Available at SSRN: https://ssrn.com/abstract=4484

Hans-Werner Sinn (Contact Author)

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