An analysis of the economic process of assimilating eastern Germany into the institutions and performance levels of western Germany which includes research and a literature overview. Topics include: the relative backwardness of East Germany's economy, and labour market and industrial policies.

Part 1 GEMSU - switching from socialism to capitalism: the collapse of "real existing socialism" in Eastern Europe and the DDR
GEMSU - the structural assimilation of the DDR
GEMSU - the underlying philosophy
GEMSU - shock therapy
GEMSU - why so rapid?
GEMSU and economic reform in Eastern Europe
short to medium term consequences of GEMSU - collapse in the Eastern economy (downward movement along the j-curve of economic reform)
the mechanism of collapse
unrealistic expectations, fiscal conseqences and tightened constraints on recovery. Part 2 The DDR economy revisited: innovation, productivity and economic growth
productivity and complexity in command and market economies
productivity in East and West Germany before unification
concluding remarks
appendix 1 - a formal model of production complexity. Part 3 The 1948 currency and economic reforms in comparison with the 1990 economic and monetary union: similarities and differences
conclusion. Part 4 Restructuring and privatization: prerequisites for real adjustment
the Treuhandanstalt - origins, objectives and achievements
privatization and employment
restructuring enterprises and structural policy
a "sold economy"?
concluding remarks
appendix 1 - theoretical notes on investment in the transformation process - policies to increase investment under conditions of irreversibility and uncertainty. Part 5 The labour market in post-unification Eastern Germany: labour in the German Democratic Republic
East German unemployment - causes, consequences and policies
wages and the cost of labour - East Germany's competitive edge
productivity differentials and wage adjustment
concluding remarks. Part 6 Catching up with the West - the achievements and limitations of creative destruction: demand side rationale for a high-wage, high-tech strategy
supply side rationale for a high-wage, high-tech strategy - the accumulation of capital and "learning-by-doing"
cumulative causation - vicious and virtuous circles of growth
the limits of a high-wage strategy. Part 7 Convergence and catch-up - results and prospects: diverging estimates of convergence
why the more pessimistic estimates may be misleading
what is the convergence target?
Eastern Germany's catch-up
growth and convergence trends after five years of unification
an historical and comparative approach to convergence. Part 8 International and domestic repercussions of German unification: consequences for Germany's EU partners and for monetary cooperation in the EU
consequences for German competitiveness - the overvaluation of the DM. Part 9 Conclusion: why GEMSU had such a devastating impact - the weakness of the DDR economy
sources of policy failure (1) - political opportunism. (Part contents)