THE RELEVANCE OF INITIAL CONDITIONS FOR THE GERMAN UNIFICATION

We analyze whether and how recent theories in which equilibria are pat h-dependent can be used to sustain the proposition that the adverse in itial conditions are relevant for the long-run outcome of the German u nification process. Though these theories are rather abstract they str ongly suggest that the actual analysis of the unification process shou ld take account of the fact that initial conditions of the German unif ication are probably more important than the neo-classical theory pred icts.