ABSTRACT
The process of economic unification has been more complex than most observers had predicted in 1989/90. This article develops the thesis that three main themes are central to the success or failure of economic unification: (1) fiscal policies; (2) employment policies; and (3) perceptions of a divergence of living standards in East and West Germany. We conclude that (1) financial transfers were less efficient than expected; (2) the unemployment problem has not been solved; and (3) though standards of living have converged in some respects, the prevailing perception in the East is still one of discrimination.
