Twenty Years of Economic Reconstruction in East Germany

This year marks the 20th anniversary of German reunification. The events of autumn 1989 revealed that the GDR was not just politically but also economically bankrupt. Given the large-scale emigration to the West after the fall of the Wall, the D-Mark was introduced quickly, despite widespread rejection of this measure by the leading economist of the time. Rapid wage increases intensified the pressure on businesses, and the adjustment shock made it necessary to rebuild the foundations of the economy at a rapid pace and an extremely high cost. With the creation of the economic and currency union, a dynamic process of growth and development was launched in many areas of society.

Twenty years later, the questions arise: Where do we stand today, what implications can be derived for the future, and what remains to be done in the policy realm? This AEQ Supplement addresses the following issues:

- Structural convergence and regional development: Should policy makers really attempt to counteract convergence? How far is East Germany currently lagging behind? What strategic decisions do policy makers need to make?

- Old-age poverty: Is there an increasing risk of old-age poverty in East Germany? What are the results of societal aging in East Germany?