Hostname: page-component-cd9895bd7-lnqnp Total loading time: 0 Render date: 2024-12-22T12:38:57.686Z Has data issue: false hasContentIssue false
  • English
  • Français

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

Published online by Cambridge University Press:  26 March 2020

Ray Barrell ,
Catherine Guillemineau  and
Dawn Holland
Ray Barrell*
Affiliation:
National Institute of Economic and Social Research
*
e-mail: [email protected]
Get access Rights & Permissions [Opens in a new window]

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.

Keywords

Growth accountingProduction function estimationO40O57E23
Type
Articles
Information
National Institute Economic Review , Volume 199 , 01 January 2007 , pp. 99 - 113
Copyright
Copyright © 2007 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We would like to thank Geoff Mason, Mary O'Mahony, Kate Robinson and Martin Weale for their input into this paper. Errors remain ours despite the time input of others that have been involved.

References

Barrell, R. and teVelde, D. (2000), ‘Catching-up of East German labour productivity in the 1990s’, German Economic Review, 1(3), pp. 271–97.CrossRefGoogle Scholar
Barrell, R. and Pain, N. (1997), ‘Foreign direct investment, technological change, and economic growth within Europe’, Economic Journal, 107, pp. 1770–6.10.1111/j.1468-0297.1997.tb00081.xCrossRefGoogle Scholar
Bean, C.R. (1981), ‘An econometric-model of manufacturing investment in the UK’, Economic Journal, 91, pp. 106.CrossRefGoogle Scholar
Böwer, U. and Guillemineau, C. (2006), ‘Determinants of business cycle synchronisation across euro area countries’, European Central Bank Working Paper Series, No 587, February.CrossRefGoogle Scholar
Ellis and Price (2004), ‘UK business investment and the user cost of capital’, The Manchester School, 72 (s1), pp 72–93.10.1111/j.1467-9957.2004.00420.xCrossRefGoogle Scholar
Fisher, F.M., Solow, R.M. and Kearl, J.M. (1977), ‘Aggregate production functions: Some CES experiments’, The Review of Economic Studies, 44(2), pp. 305–320.10.2307/2297068Google Scholar
Frankel, J. and Rose, A. (1996), ‘Economic structure and the decision to adopt a common currency’, University of California at Berkley, CIDER working paper C96-073.Google Scholar
Hamermesh, D.S. (1986), ‘The demand for labor in the long run’, in Ashenfelter, O. and Layard, R. (eds), Handbook of Labor Economics, Volume I, Oxford, Elsevier Science Publishers B.V., pp. 429–71.Google Scholar
Hendry, D.F. and Juselius, K. (2000), ‘Explaining cointegration Part II’, mimeo.10.5547/ISSN0195-6574-EJ-Vol21-No1-1CrossRefGoogle Scholar
Hughes Hallett, A. and Richter, C. (2004), ‘A time frequency analysis of the coherences of the US business cycle and the European business cycle’, CEPR Discussion Paper Series, No 4751, November.Google Scholar
Johansen, S. (1988), ‘Statistical-analysis of cointegration vectors’, Journal of Economic Dynamics and Control, 12, pp. 231.10.1016/0165-1889(88)90041-3CrossRefGoogle Scholar
Jones, H. (1974), Modern Theories of Economic Growth, London, Nelson.Google Scholar
Metz, R., Riley, R. and Weale, M. (2004), ‘Economic performance in France, Germany and the United Kingdom: 1997-2002’, National Institute Economic Review, 188, pp. 83–99.CrossRefGoogle Scholar
OECD (2003), ‘The diffusion of ICT and economic growth. Evidence from OECD countries, industries and firms’.Google Scholar
UNIDO (2005), Capability Building for Catching-up.Google Scholar