This paper analyzes the process of transformation of the industrial structure to a market economic system and the German Democratic Republic's pricing system. The analyses of this price system will be very helpful in understanding the changes in the industrial structure in the process of German unification. Furthermore, it will furnish relevant insights for the economic integration of the two Koreas.

The contents of this paper are organized as follows. Section B summarizes the German Democratic Republic's price system. Section C reviews the process of the transformation of the industrial structure to a market economic system. Policy implications for economic integration on the Korean peninsula and a summary are given in Section D.