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Decomposing Growth in France, Germany and The United Kingdom Using Growth Accounting and Production Function Approaches

Author

Listed:
  • Ray Barrell

    (National Institute of Economic and Social Research, r.barrell@niesr.ac.uk)

  • Catherine Guillemineau

    (National Institute of Economic and Social Research)

  • Dawn Holland

    (National Institute of Economic and Social Research)

Abstract

This paper uses Growth Accounting and Production Function Analysis to decompose the factors behind differences in growth between the UK, France and Germany between 1992 and 2005. Most of the growth differential between the United Kingdom, Germany and France since 1993 can be explained by structural factors. The United Kingdom's higher growth has originated essentially in the finance and business sector, which is ICT-intensive. Germany's weak growth reflects in large part the aftermath of the unification shock and a continued fall in the labour input. At the same time there has been a sharp slowdown in knowledge accumulation, which seems to have restrained labour productivity growth. After EMU, the performance of German manufacturing improved relative to both France and the United Kingdom, while capital deepening became less supportive to growth because of lower investment in infrastructures and dwellings. France's higher growth relative to Germany since 1999 comes essentially from the non-tradable sectors and from a higher labour input. This may be partly related to a more significant decline in the volatility of real interest rates.

Suggested Citation

  • Ray Barrell & Catherine Guillemineau & Dawn Holland, 2007. "Decomposing Growth in France, Germany and The United Kingdom Using Growth Accounting and Production Function Approaches," National Institute Economic Review, National Institute of Economic and Social Research, vol. 199(1), pages 99-113, January.
    • Handle: RePEc:sae:niesru:v:199:y:2007:i:1:p:99-113
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    Cited by:

    1. Krasnopjorovs, Olegs, 2013. "Latvijas ekonomikas izaugsmi noteicošie faktori [Factors of Economic Growth in Latvia]," MPRA Paper 47550, University Library of Munich, Germany.
    2. Gilles Mourre, 2009. "What explains the differences in income and labour utilisation and drives labour and economic growth in Europe? A GDP accounting perspective," European Economy - Economic Papers 2008 - 2015 354, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Ray Barrell & Sylvia Gottschalk & Dawn Holland & Ehsan Khoman & Iana Liadze & Olga Pomerantz, 2008. "The impact of EMU on growth and employment," European Economy - Economic Papers 2008 - 2015 318, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.

    More about this item

    Keywords

    Growth accounting; Production function estimation JEL classifications: 040; 057; E23;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production

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