ifo Dresden: The Majority of German Districts Are Economically Resilient

More than 90 percent of German districts are economically robust even in times of crisis. This is the finding of a study conducted by the ifo Institute’s Dresden Branch. Districts with a broadly diversified economic structure and many highly qualified employees are able to recover particularly quickly and fully from an economic slump. “These results from the last major recession in 2008–2009 give us hope for the current coronavirus recession,” says Mona Förtsch, an ifo researcher in Dresden.

German districts were affected to varying degrees by the economic slump during the 2009 financial crisis. Most districts made a rapid and full recovery. A diversified economic structure and the presence of many start-ups apparently contributed to these regions’ robustness in the face of crises. In contrast, districts that were heavily focused on manufacturing and services were particularly slow to recover.

Only 5 percent of districts had still not managed to reach their pre-crisis levels by 2017. These are predominantly independent cities in western Germany that had a very high per capita gross domestic product before the crisis and had suffered a severe slump as a result of the financial crisis.