Political and Economic Impacts of German Reunification

Abstract

This article aims to provide a holistic and comprehensive summary on the political impacts as well as economic impacts of the Reunification of Germany in 1990 due to the fact that politics and economics are inter-linked.This article analyses political impacts through linking the reunification with other geopolitical changes in the world that took place afterwards, and discovered that the reunification did not effectively eliminate the division between Eastern and Western Germany and strengthened right-wing extremism in the East, yet contributed to the easing of global tensions, the dissolution of the Soviet Union and the integration of Europe. This article analyses economic impacts mainly through the comparison of various macroeconomic indicators, including annual GDP growth rate, unemployment rate, and inflation rate, of the German Democratic Republic(GDR) and the Federal Republic of Germany(FRG) before reunification and western and eastern Germany after reunification, and discovered that the reunification had in general negative domestic economic impacts, and that the economic disparity between eastern and western Germany has not been eliminated yet.