Distribution of Economic Power and Income between Major Cities and                                    Their Regions in Germany

Werner Münzenmaier 
(Ministry of Finance and Economics Baden-Wuerttemberg, Neues Schloss, D70173 Stuttgart, Germany)

Abstract: Based on National Accounts Data for production and income, this article deals with the question how intensive the five economically strongest German cities radiate into their neighboring regions. In this respect, the situation is very different for the five cities and their regions: (1) Two cities (Hamburg, Dusseldorf) are very dominant and exceed the districts of their respective region in all four per-capita indicators; (2) although Munich is an economically very strong city it is surpassed by some rural districts of its region with respect to productivity and income; (3) Frankfurt as an international banking center has a very productive economy and offers the highest earnings of all major cities but it looses a lot of purchasing power due to the commuting of well earning employees residing in more attractive neighboring communities; (4) the indicators show very small disparities within the Region of Stuttgart which is characterized by the production of cars and other investment goods and insofar differs from the other regions with core cities dominating in business services.

Key words: regional accounts; labor productivity; compensation of employees; income; cities

JEL codes: E01, J30, O18, R12