This paper challenges the convergence hypothesis advanced by R. Barro and X. Sala-i-Martin as it is applied to explain the forces behind, patterns exhibited by and time line for German regional convergence. Exposed in some detail are the spurious neoclassical and marginalist assumptions,...

Relatively high rates of persistent unemployment plaguing the eastern region of Germany are argued to be caused especially by two factors engendering slack labor demand relative to supply. Demand for East German labor declined as (1) rapid privatization was followed by cross-regional capital...