The Economic Impact of Social Ties: Evidence from German Reunification∗

Abstract

We use the fall of the Berlin Wall in 1989 to identify a causal effect of social ties between West and East Germans on economic growth, household income, and firm investment: West German regions which (for idiosyncratic reasons) had closer social ties to East Germany prior to 1989 experienced faster growth in income per capita after reunification. A one… (More)

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