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Germany’s Continued Productivity Slump: An Industry Analysis

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Author Info
Theo S. Eicher
Thomas Strobel ()

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Abstract

US productivity growth surged twice post 1995 and post 2000. In contrast Germany registered two successive productivity reductions during that same period of time. Previous analysis of the post-2000 decline has been limited, however, by the short time series of the available data. In this paper we extend the Ifo Industry Growth Accounting Database that provides detailed industry-level investment information up to 2004. While much attention has focused on the reduction in German labor hours, our post-2000 data shows that a fledgling recovery in German non-ICT investment was offset by a widespread collapse in German total factor productivity. Almost half of German industries (accounting for over 45 percent of German output) did not experience positive TFP growth post 2000. Industries that constitute over a quarter of Germany’s value-added exhibited negative labor productivity growth during the same period. The negative German productivity trend is thus continuing, which accelerates the country’s departure from the productivity frontier.

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Publisher Info
Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 58.

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Date of creation: 2008
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Handle: RePEc:ces:ifowps:_58

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Related research
Keywords: Growth accounting; industry productivity analysis; information and communication technology;

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Find related papers by JEL classification:
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
L80 - Industrial Organization - - Industry Studies: Services - - - General
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Robert Inklaar & Mary O'Mahony & Marcel Timmer, 2005. "ICT AND EUROPE's PRODUCTIVITY PERFORMANCE: INDUSTRY-LEVEL GROWTH ACCOUNT COMPARISONS WITH THE UNITED STATES," Review of Income and Wealth, Blackwell Publishing, vol. 51(4), pages 505-536, December. [Downloadable!] (restricted)
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  2. Stephen D. Oliner & Daniel E. Sichel, 2000. "The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 3-22, Fall. [Downloadable!] (restricted)
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  3. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD, Economics Department. [Downloadable!]
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  4. Dale Jorgenson & Mun Ho & Jon Samuels & Kevin Stiroh, 2007. "Industry Origins of the American Productivity Resurgence," Economic Systems Research, Taylor and Francis Journals, vol. 19(3), pages 229-252. [Downloadable!] (restricted)
  5. Kevin J. Stiroh, 2002. "Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?," American Economic Review, American Economic Association, vol. 92(5), pages 1559-1576, December. [Downloadable!]
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  6. van Ark, Bart, 1998. "Productivity," Journal of the Japanese and International Economies, Elsevier, vol. 12(2), pages 171-174, June. [Downloadable!] (restricted)
  7. van Ark, Bart & Inklaar, Robert, 2006. "Catching up or getting stuck? Europe's troubles to exploit ICT's productivity potential," GGDC Research Memorandum GD-79, Groningen Growth and Development Centre, University of Groningen. [Downloadable!]
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  1. Michael Overesch & Georg Wamser, 2008. "Who Cares about Corporate Taxation? Asymmetric Tax Effects on Outbound FDI," Ifo Working Paper Series Ifo Working Paper No. 59, Ifo Institute for Economic Research at the University of Munich. [Downloadable!]
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