This paper tries to briefly examine the German experiences with unification, especially the integration of two different economic systems and derive implications for the coming reunification of the two countries in the Korean peninsula. It is organized as follows. In section 2, current economic performances and future prospects of the united German economy are discussed, and main economic policy measures practiced after GEMSU are reviewed. Here, also, the activities of the Treuhandanstalt, which is a government trust engaged in privatizing the formerly state-owned properties, will be introduced. Section 3 presents a simple model of system transformation that is developed based on the German experiences and could be used for the Korean case. Here, the effects on the integration process of GEMSU will be discussed briefly. In Section 4, implications on the Korean unification of German experiences with unification will be derived based upon the discussions so far. The paper ends with a summary of results and concluding remarks in section 5.

Contents I . Introduction II . Current Performances and Prospects of the German Economy 1. Main Economic Indicators 2. Review of Main Economic Policy Measures (1) Trends in Transfer Payments to the East Germany (2) Current Developments in the Labor Market (3) Monetary Policy by the Deutsche Bundesbank 3. Activities of the Treuhandanstalt III. Transformation Process of the East German Economy 1. A Simple Model of System Transformation-The East German Case 2. The German Monetary Union Revisited IV. Implications for Korean Unification V. Summary and Conclusions 〈References〉