Growth In Germany Research Articles

Understanding the Great Changes in the World: Gaining Ground and Losing Ground since World War II

This lecture interprets the great tectonic shifts in the global economy that I have witnessed since I began studying economics in the 1950s. There are three stories of gaining ground (``catching up") on the world's lead economy and one of losing ground. This experience can help us to get right our international macroeconomics: Progress and prosperity in a country are mainly driven by envisaged openings for innovation or imitation of new things, not human capital formation or tax cuts. The experience also help us get right the political economy of economic performance: Dynamism is not required for episodes of high growth: Any economy can grow fast up to its potential and enjoy temporary prosperity in the effort. Yet it cannot pull up to the productivity level nor sustain the prosperity of the lead economy without having the latter's dynamism. Dynamism requires that innovation be ample, aimed in good directions and finding managers and consumers open to novelty. Some dissenters deny the premise, claiming that the Continent could not have its ``glorious years" of rapid growth and high activity without commensurate dynamism: the two are yoked together. They view that rapid growth in Germany, France and Italy as the fruit of economies that in the '40s got back their dynamism back when Ludwig Erhard unshackled them from the corporatist institutions erected in the interwar years and that lost their dynamism in the '70s when interest groups reacquired their stranglehold on economic change. I take a simpler view. The glorious years were the result not of a brief rebirth of dynamism but rather the fortunate result of one-time opportunities to pluck at low cost the technologies and commercial successes developed in the U.S. and elsewhere overseas. My view need not suppose that the Continent has had much dynamism at any time since corporatist ideas took root in the late 1920s – only enough to imitate or adapt overseas advances, plus long enough study of them. For the moment, such advances may be still be so new that such a modicum of dynamism is not yet sufficient to spark imitation.

The family gap in pay in Europe: a cross-country study

In this paper we present estimates of the penalty in pay associated with motherhood for 11 European countries. Firstly, analysis of the European Community Household Panel Survey (ECHP) reveals that significant penalties in pay exist within Germany, Denmark, the United Kingdom, Ireland, Spain and Portugal. Analysis for Germany (using the German Socio-Economic Panel) and the UK (using the British Household Panel Survey) reveals that career breaks contribute towards lower earnings growth. While periods of family formation are associated with lower earnings growth in Germany, in the UK completed spells of family formation are associated with a recovery in earnings growth.

Demographic changes?consequences for the transportation sector

The article first introduces the “daily mobility” parameters which explain the causes of traffic growth in Germany in the past. Then the expected demographic changes (aging, shrinking, reduction of average household size) and their effects on transportation and spatial development are summarized. Even nowadays the daily passenger traffic is becoming less in the eastern parts of Germany. In the western and economically better-off sections traffic growth will slow down and after 2040–2050 the author expects a general reduction. The article concludes with recommendations on how to adjust transportation planning to these new conditions. The author suggests that the focus should be more on low-cost, so-called soft measures, than on costly hard infrastructure that might be overdimensioned even during its lifetime. Also the particular needs of the future majority of the population, the elderly, have to be better matched.

Employment Effects of Different Innovation Activities: Microeconometric Evidence

Using the model recently developed by Jaumandreu (2003) this paper reports new results on the relationship between innovation and employment growth in Germany. The model is tailor-made for analysing firm-level employment effects of innovations using specific information provided by CIS data. It establishes a theoretical link between employment growth and innovation output. The econometric analysis confirms that product innovations have a positive impact on employment. In contrast to previous studies, this effect is independent of the novelty degree. Moreover, different employment effects between manufacturing and service firms regarding process innovations were found. Finally, from a cross country perspective the results for Germany are similar to those found for Spain and the UK.

The strategic bombing of German cities during World War II and its impact on city growth

We construct a unique data set in order to analyse whether or not a large temporary shock has an impact on city growth. Following recent work by Davis and Weinstein on Japan, we take the strategic bombing of German cities during World War II as an example of such a shock, and analyse its impact on post-war German city growth. If the war shock has only a temporary impact, then there will be a tendency towards mean reversion. Our main finding is that the bombing had a significant but temporary impact on post-war city growth in Germany as a whole as well as in West Germany separately, but that this is not the case for city growth in East Germany.

Economic Performance in France, Germany and the United Kingdom: 1997–2002

We assess the performance of France, Germany and the United Kingdom over the period 1997-2002. Gross and net output per hour worked are considerably lower in the UK than in France and Germany. GDP in France and the UK have grown at the same rates over the period although real national income in the UK has grown considerably faster than in France. Seen from the supply side, French growth is substantially attributable to growth in total factor productivity while in the UK factor inputs are more important. There is, nevertheless, a concern that, at the margin, UK growth may be depreciation-intensive and therefore of poor quality. Germany's growth has been slow because productive inputs have grown only slowly and its weak performance is probably structural rather than cyclical. There does seem to be room for substantial increases in labour input in both France and Germany to be achieved through reform to labour market conditions such as tax rates on low paid workers.

Local Economic Structure and Industry Development in Germany, 1993-2001

This paper formulates a weighted regression approach to analyze the impact of dynamic MAR- and Jacobs-externalities on local employment growth in Germany between 1993 and 2001. We find that Jacobs-externalities matter both in manufacturing, and service industries. MAR-externalities are present only in services.

Do Corporate Control and Product Market Competition Lead to Stronger Productivity Growth? Evidence from Market-Oriented and Blockholderbased Governance Regimes

This study investigates the impact of corporate governance and product market competition on total factor productivity growth in Germany and the UK. For Germany, the prototype of a bank-based governance system, productivity grows faster in firms controlled by financial institutions (in particular, banks and insurance companies) and intense competition reinforces this beneficial impact. Furthermore, the importance of the German creditors (mostly banks) for productivity growth is particularly significant in firms which experience financial difficulties or are in financial distress. For the UK, a market-based governance system, we do not find any evidence that creditors play a disciplinary role. Still, there is strong evidence that shareholder control (by insiders, private outsiders and financial institutions) leads to substantial increases in productivity in poorly performing firms. We also find evidence that product market competition is a substitute for blockholder control in the UK.

Public Sector Centralization and Productivity Growth: Reviewing the German Experience

The paper examines the role of the vertical structure of the public sector for economic growth in Germany in a long-term perspective. A theoretical model shows that, due to spillover effects of public service provision across lower level governments, federal government activities could have substantially contributed to productivity growth. A review of the German experience starting in the last quarter of the 19th century shows that the overall development is consistent with a stimulating role of the federal government in general and in specific areas like, for instance, transport and communication. However, a further empirical analysis of the period after World War II raises doubts about the efficiency of the vertical structure of the public sector with regard to productivity growth, since the results indicate that a smaller budget share of the state level would have benefited growth.

The determinants of production-related carbon emissions in West Germany, 1985–1990: assessing the role of technology and trade

This paper examines the determinants of the substantial decline of West German production-related carbon intensity in the face of falling energy prices. A computable general equilibrium model is used to determine the simulated effects of observed changes of world energy prices and domestic energy policy on the sectoral patterns of carbon emissions, energy consumption, output, value-added and other indicators of structural change. The structural changes not accounted for by energy prices and energy policy are attributed to changing patterns of productivity growth in Germany and the rest of the world (ROW) and changing patterns of ROW demand. Weights on these driving forces are selected by least squares. One key finding is that the contribution of ROW productivity and demand patterns to emission-relevant structural change unaccounted for by energy prices and energy policy is just under 30%. The remainder is split almost equally among patterns of domestic autonomous energy efficiency improvement and domestic labor efficiency patterns.

From socialist showcase to Mezzogiorno? Lessons on the role of technical change from East Germany's post-World War II growth performance

We revisit East Germany's growth performance relative to West Germany since World War II. It is shown that before German reunification in 1991, East Germany's regions experienced much lower rates of technical progress than Western regions, while after German reunification, the opposite was the case: relatively high technical progress in the East explains almost half of the East's catch-up with West Germany between 1991–1996. We emphasize the level of domestic innovative activity as well as the extent of international technology diffusion as key reasons for this. These factors explain why East Germany was not the socialist showcase economy before reunification, and suggest that it will not be Germany's Mezzogiorno, staying persistently behind West Germany as does Italy's South relative to its North. The analysis points to the need to study the contribution of technical change as source of growth independently from the accumulation of rival factor inputs such as capital.

Education and economic growth in Germany before the second world war: an econometric analysis of dynamic relations

The nature of the dynamic relations between education and economic growth is far from having been determined by economists or historians and is probably one of the longest unsettled controversies in the field of economic history. In the context of this controversy the paper is devoted to the dynamic relations between public expenditure on education and national income in Germany before the Second World War.

A Demand-Oriented Explanation of Economic Growth in Germany

(1996). A Demand-Oriented Explanation of Economic Growth in Germany. Journal of Post Keynesian Economics: Vol. 19, No. 1, pp. 101-111.

Knowledge-intensive and resource-concerned growth in Germany

A structural analysis of the German economy is complemented by an analysis of the potential which is maybe not yet ready for economic use. Germany's science and research systems have great potential which industries have not yet used. The structural link between Germany's innovation and science systems is apparently not close enough to allow a more profound scientific base for innovative activities in the corporate sector. Industry in eastern Germany has been insufficiently integrated into international technology competition to date. Germany's traditional advantages in the technology race are dwindling with the global dissemination of scientific and technological know-how. It is vital that Germany's strengths as a location for research and industry be used as a springboard for making better use of the country's potential know-how.

Inflation and total factor productivity in Germany

This paper has found a significant and substantial negative relationship between inflation and economic growth in Germany. Thus, inflation substantially reduced the rate of productivity growth and output growth in Germany. German policymakers, especially the Bundesbank, have emphasized the importance of low inflation rates, and inflation in Germany has been less than in most OECD countries. As a result, Germany has benefitted from relatively high rates of economic growth. But had the Bundesbank succeeded in achieving zero inflation, the underlying rate of productivity growth would have been almost a third higher and output growth about a sixth higher.

Balance of payments determined growth in Germany

Balance of payments determined growth in Germany

Empirical Modelling of Trade Union Growth in Germany, 1956—1986: Traditional versus Cointegration and Error Correction Methods

Ein empirisches Modell des Wachstums der deutschen Gewerkschaften 1956—86: Traditionelle Methoden versus Kointegrations- und Fehlerkorrekturtechniken. — Dieser Aufsatz liefert eine Erklarung fur den Anstieg und Ruckgang der Zahl der Gewerkschaftsmitglieder in der Bundesrepublik Deutschland von 1956 bis 1986. Darin wird fur die empirische Modellierung ein alternativer Ansatz gewAhlt, der auf der in jungster Zeit entwickelten Kombination von Kointegrations- und Fehlerkorrekturtechniken beruht. Das einfache empirische Modell kann die kurzfristige Dynamik und die langfristigen Trends der Mitgliedschaft wahrend dieser Periode in einer sehr befriedigenden Weise erklaren. Es enthalt ein Konjunkturzyklusmodell, das zur Analyse der Zu- und Abnahme deutscher Gewerkschaften entwickelt wurde, und liefert Schatzungen der Elastizitat von Faktoren, die die Zahl der Mitglieder langfristig beeinflussen.

German Engineers and American Social Theory: Historical Perspectives on Professionalization

When historians turn to the social sciences for help with the task of ordering their data or making their sources speak more clearly, the results can be rewarding in unexpected ways. So it is if one applies the twin concepts profession and professionalization to the German context-in particular, to the history of German engineers in the nineteenth century. At first sight, an idea like the “professionalization of the German engineers” seems straightforward enough. In tandem with the growth of Germany's science-based industries and unparalleled system of technical education, it suggests the emergence of the men who occupied the critical positions in these institutions and embodied technological progress. A notion such as the “rise of the German engineering profession,” therefore, stirs visions of a grand metamorphosis, in which the land of poets and thinkers—and of Junkers, bureaucrats, and mandarins—turned into the world of Siemens, Porsche, Mannesmann, Bosch, Diesel, Daimler-Benz, etc.

New Perspectives On the Capitalist Process

This book represents an important contribution to the theoretical literature on Latin American development. Weaver uses the concepts of competitive, finance, and monopoly capitalism, but defines them on the basis of different characteristics than those generally utilized. Using these altered categories, he offers an analysis which seeks to clarify why South American industrial development occurred when it did and in the manner in which it did. Along the way he takes issue with much of the conventional wisdom which has developed around dependency theory. Weaver sees the distinctive general characteristics of the three forms of capitalism as having been caused by the predominant type of production particular to each. For competitive capitalism, this was the production of wage goods; for finance capitalism, intermediate and capital goods; and for monopoly capitalism, modern consumer goods. Competitive capitalist development occurred in England in the late eighteenth and nineteenth centuries, whereas finance capitalism was the means of industrial growth in Germany during the second half of the nineteenth century. Competitive capitalism involved labor intensive production in many small firms. Finance capitalism was undertaken by a few large firms using capital intensive technology. Competitive capitalism in England was vitally supported by the dynamism of English agriculture in the same period (1980:32). However, finance capitalism succeeded in Germany despite the continuing backwardness of the agricultural sector (1980: 40-41). Essential in both these forms of capitalism was political and social control over the workforce. In South America' after the revolutions the need of the dominant classes to maintain forms of labor relations which would facilitate control of the workforce was one of the major factors which prevented the local develop*Marjorie Bray is the Coordinator of the Latin American Studies Program at California State University, Los Angeles. 'Although Mexico is occasionally referred to, the focus of the work is on South America; Central America and the Caribbean are not mentioned.

The Kreditbanken and German Growth: A Postscript

Considers the effect of non-stationarity on the analysis of the effect of banks on economic growth in Germany in the late-19th and early-20th centuries. (This abstract was borrowed from another version of this item.)