Kiel Working Papers, Kiel Institute for World Economics
No 998:
Subsidization and Structural Change in Eastern German Transition: Did Economic Policy Meet Its Objectives?
Katja Gerling
Abstract: Economic policy interventions of a scale as effected in
eastern Germany can be expected to have a significant impact on the
economy, which may be in accordance with the objectives of the policy
measures or manifest itself in distortions of several kinds. This paper
analyzes the structural effects of investment subsidization as one of the
core policy instruments by means of an error-correction model of factor
demand and output. It intends to find out whether investment subsidization
contributes to creating competitive economic structures, employment and
growth or whether it just fosters an exaggerated capital intensity.
Keywords: Subsidization, transition, factor demand, substitution, panel estimation; (follow links to similar papers)
JEL-Codes: E22,; E23,; E24,; H20,; C33,; C51; (follow links to similar papers)
96 pages, August 2000
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