Under the guiding theme "From Transition to European Integration", the IWH places the understanding of the determinants of long term growth processes at the centre of the research agenda. Long term growth processes in Germany (East and West) and in Europe can only be understood in the context of economic convergence in Europe and international integration. Ultimately, economic convergence and growth depend on an efficient (re-)allocation of resources (capital and labour) and productivity growth. Therefore, the researchers at the IWH examine the determinants of capital (re-)allocation, structural change, innovation, productivity growth, and macroeconomic dynamics and stability.