The Costs of Remoteness: Evidence from German Division and Reunification

  title={The Costs of Remoteness: Evidence from German Division and Reunification},
  author={Stephen J. Redding and Daniel Sturm},
  journal={Development Economics},
This paper exploits the division of Germany after the Second World War and the reunification of East and West Germany in 1990 as a natural experiment to provide evidence of the importance of market access for economic development. In line with a standard new economic geography model, we find that following division cities in West Germany that were close to the new border between East and West Germany experienced a substantial decline in population growth relative to other West German cities. We… 

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