Resource title

Industrial policy and the East German productivity puzzle

Resource image

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Resource description

Catching-up of East German productivity to West German levels has completely faded out sinde the mid 1990s. The remaining productivity gap cannot be attributed to an inferior capital endowment. Instead, it appears to be the result of an inappropriate design of industrial policy which fostered the specialization of East German industry on capital intesive smoke-stack industries. These industries are absorbing a large share of factor inputs, whereas their contribution to aggregate output is rather limited. East Germany will have to face, therefore, another wave of painful structural adjustment when public subsidies will further be reduced.

Resource author

Henning Klodt

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/2305

Resource license

Adapt according to the presented license agreement and reference the original author.