Berlin Wall Fall Sparks Boom, Confounds Skeptics: Chart of Day
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Christiane Lenzner and Julie Cruz
Nov. 6 (Bloomberg) -- The toppling of the Berlin Wall 20 years ago sparked a surge in German stocks and bonds, confounding economists who’d predicted the cost of unifying East and West Germany would stunt economic growth.
The CHART OF THE DAY shows the benchmark DAX Index of equities and the REX Performance Index, a measure of German government bonds, since 1989. Both outperformed gold and the pan-European Dow Jones Stoxx 600 Index. The chart also shows Germany’s annual per-capita gross domestic product until the end of last year.
The cost of unifying East and West Germany was 2 trillion euros ($2.97 trillion), according to a study by Klaus Schroeder, professor at Berlin’s Free University, published Oct. 28. Investors say that cost has paid off as the fall of Europe’s Iron Curtain boosted global trade.
“It opened up economies in Eastern Europe,” said Trudbert Merkel, manager of Deka Investment GmbH’s $5 billion Dekafonds in Frankfurt. “Germany was able to maintain its top spot in the export business and become less dependent on the U.S. The beginning of globalization helped soften the costs of the reunification.”
The DAX has more than tripled since Nov. 9, 1989, when the East German government allowed Berliners to breach the wall that had divided their city for 28 years.
(To save a copy of the chart, click here.)
To contact the reporters on this story: Christiane Lenzner in Frankfurt at [email protected]; Julie Cruz in Frankfurt at [email protected].
Last Updated: November 5, 2009 19:00 EST
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Christiane Lenzner and Julie Cruz
Nov. 6 (Bloomberg) -- The toppling of the Berlin Wall 20 years ago sparked a surge in German stocks and bonds, confounding economists who’d predicted the cost of unifying East and West Germany would stunt economic growth.
The CHART OF THE DAY shows the benchmark DAX Index of equities and the REX Performance Index, a measure of German government bonds, since 1989. Both outperformed gold and the pan-European Dow Jones Stoxx 600 Index. The chart also shows Germany’s annual per-capita gross domestic product until the end of last year.
The cost of unifying East and West Germany was 2 trillion euros ($2.97 trillion), according to a study by Klaus Schroeder, professor at Berlin’s Free University, published Oct. 28. Investors say that cost has paid off as the fall of Europe’s Iron Curtain boosted global trade.
“It opened up economies in Eastern Europe,” said Trudbert Merkel, manager of Deka Investment GmbH’s $5 billion Dekafonds in Frankfurt. “Germany was able to maintain its top spot in the export business and become less dependent on the U.S. The beginning of globalization helped soften the costs of the reunification.”
The DAX has more than tripled since Nov. 9, 1989, when the East German government allowed Berliners to breach the wall that had divided their city for 28 years.
(To save a copy of the chart, click here.)
To contact the reporters on this story: Christiane Lenzner in Frankfurt at [email protected]; Julie Cruz in Frankfurt at [email protected].
Last Updated: November 5, 2009 19:00 EST
