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Macroeconomic Aspects of German Unification

61 Pages Posted: 17 Oct 2007  

Hans-Werner Sinn

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

Date Written: January 1991

Abstract

The paper comments on the economic effects of the German unification. Apart from discussing the unification in an international perspective, analyzing the distributional consequences, and pointing to structural adjustment problems, it emphasizes the distinction between the frequently cited money overhang and the real asset overhang which characterizes communist countries. The paper argues that the unification paid too little attention to the latter, endowing East Germans with insufficient claims on state owned enterprises. The centralized privatization of state owned enterprises, which bypasses the East German population, is seen as a major obstacle to quick recovery, and an alternative privatization procedure is discussed.

Suggested Citation

Sinn, Hans-Werner, Macroeconomic Aspects of German Unification (January 1991). NBER Working Paper No. w3596. Available at SSRN: https://ssrn.com/abstract=471548

Hans-Werner Sinn (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute) ( email )

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National Bureau of Economic Research (NBER)

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Ludwig Maximilian University of Munich

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