The basic model of New Economic Geography - An Attempt to Assessment of Germany's Case
Podstawowy model nowej ekonomii geograficznej a przypadek Niemiec - próba oceny

Summary/Abstract: The aim of this paper is evaluation of the economic development of Germany against the background of the basic model of New Economic Geography (NEG). The simple analysis of evolution of income, wages and living costs in the “old” (former BRD) and “new” (former DDR) federal states after Reunification confirms that spatial polarization persists. The western part of the country continues to be more attractive for both entrepreneurs and employees. Application of the basic NEG model offers a possibility to explain the phenomena in terms of centripetal and centrifugal forces. Such an approach although it may be associated with the zero sum game idea denotes that Eastern Germany will have to improve its performance in relation to the Western part i.e. generate more powerful centripetal forces advancing business ventures in the east of the country.

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