TY  - JOUR
AU  - Keller,Wolfgang
TI  - From Socialist Showcase to Mezzogiorno? Lessons on the Role of Technical Change from East Germany's Post-World War II Growth Performance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6079
PY  - 1997
Y2  - July 1997
UR  - http://www.nber.org/papers/w6079
L1  - http://www.nber.org/papers/w6079.pdf
N1  - Author contact info:
Wolfgang Keller
Department of Economics
University of Colorado-Boulder
Boulder, CO 80309-0256
Tel: 303/735 5507
Fax: 303/492 8960
E-Mail: Wolfgang.Keller@colorado.edu
AB  - In this paper we emphasize the contribution of technical change, broadly defined, towards productivity growth in explaining the relative East Germany-West Germany performance during the post-World War II era.  We argue that previous work was excessively focused on physical capital investments determining productivity differentials, which consequently led to an overestimation of the East German performance during the Socialist era, and an overly pessimistic assessment of the East German prospects of catching up with West Germany during the post-reunification era.  We show, first, that the rates of technical change in the manufacturing industries of East German states were significantly below those in Western states, helping to account for the fact that East Germany was not the socialist showcase for which it was frequently taken before German reunification.  Second, we demonstrate that the rates of technical change in the East German states have been considerably higher than those in the West since German reunification.  This suggests that the Mezzogiorno prediction for East Germany--that it will stay persistently behind West Germany as does Italy's South relative to its North--, based on an analysis of the need for physical capital accumulation alone, will prove too pessimistic.
ER  -