IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-540-32611-3_8.html
   My bibliography  Save this book chapter

Capital, Labour and Productivity: What Role Do They Play in the Potential GDP Weakness of France, Germany and Italy?

In: Convergence or Divergence in Europe?

Author

Listed:
  • Antonio Bassanetti

    (Banca d’Italia)

  • Jörg Döpke

    (Deutsche Bundesbank)

  • Roberto Torrini

    (Banca d’Italia)

  • Roberta Zizza

    (Banca d’Italia)

Abstract

Summary The paper analyses the recent supply side developments in France, Germany, and Italy by employing a non-parametric approach to estimate potential GDP. The analysis reveals marked heterogeneity among the three countries with regard to the contribution of labour input. Similarities can be found, however, in the slowdown of capital accumulation and in the pronounced worsening of Total Factor Productivity growth. The paper is complemented by estimates of some measures of wage pressures and profitability in order to assess the role played by the movements of relative input prices in the intensity of use of primary factors in the production process.

Suggested Citation

  • Antonio Bassanetti & Jörg Döpke & Roberto Torrini & Roberta Zizza, 2006. "Capital, Labour and Productivity: What Role Do They Play in the Potential GDP Weakness of France, Germany and Italy?," Springer Books, in: Convergence or Divergence in Europe?, pages 123-159, Springer.
    • Handle: RePEc:spr:sprchp:978-3-540-32611-3_8
    DOI: 10.1007/3-540-32611-1_8
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Antonio Bassanetti & Massimiliano Iommi & Cecilia Jona-Lasinio & Francesco Zollino, 2004. "La crescita dell'economia italiana negli anni novanta tra ritardo tecnologico e rallentamento della produttivit�," Temi di discussione (Economic working papers) 539, Bank of Italy, Economic Research and International Relations Area.
    2. Apel, Mikael & Jansson, Per, 1999. "A theory-consistent system approach for estimating potential output and the NAIRU," Economics Letters, Elsevier, vol. 64(3), pages 271-275, September.
    3. Hodrick, Robert J & Prescott, Edward C, 1997. "Postwar U.S. Business Cycles: An Empirical Investigation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 1-16, February.
    4. Roberta Zizza, 2006. "A measure of output gap for Italy through structural time series models," Journal of Applied Statistics, Taylor & Francis Journals, vol. 33(5), pages 481-496.
    5. Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, productivity and growth: OECD evidence [‘A model of growth through creative destruction’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 18(36), pages 9-72.
    6. Jean Pisani-Ferry, 2003. "The Surprising French Employment Performance: What Lessons?," CESifo Working Paper Series 1078, CESifo.
    7. Basu, Susanto & Fernald, John G., 2002. "Aggregate productivity and aggregate technology," European Economic Review, Elsevier, vol. 46(6), pages 963-991, June.
    8. Alessandra Colecchia & Paul Schreyer, 2003. "The contribution of information and communication technologies to economic growth in nine OECD countries," OECD Economic Studies, OECD Publishing, vol. 2002(1), pages 153-171.
    9. Roberto Torrini, 2005. "The profit share and return on capital in Italy: a tentative interpretation," Temi di discussione (Economic working papers) 551, Bank of Italy, Economic Research and International Relations Area.
    10. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas [‘The macroeconomics of low inflation’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 21(45), pages 6-59.
    11. Francesco Daveri & Cecilia Jona-Lasinio, 2005. "Italy's Decline: Getting the Facts Right," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(4), pages 365-410, December.
    12. Andrew C. Harvey & Thomas M. Trimbur, 2003. "General Model-Based Filters for Extracting Cycles and Trends in Economic Time Series," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 244-255, May.
    13. Camba-Mendez, Gonzalo & Rodriguez-Palenzuela, Diego, 2003. "Assessment criteria for output gap estimates," Economic Modelling, Elsevier, vol. 20(3), pages 529-562, May.
    14. Silvia Fabiani & Ricardo Mestre, 2004. "A system approach for measuring the euro area NAIRU," Empirical Economics, Springer, vol. 29(2), pages 311-341, May.
    15. Barro, Robert J, 1999. "Notes on Growth Accounting," Journal of Economic Growth, Springer, vol. 4(2), pages 119-137, June.
    16. Harvey, A C & Jaeger, A, 1993. "Detrending, Stylized Facts and the Business Cycle," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 8(3), pages 231-247, July-Sept.
    17. Oliver J. Blanchard, 1997. "The Medium Run," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 89-158.
    18. Estevão, Marcello & Nargis, Nigar, 2005. "Structural Labor Market Changes in France," IZA Discussion Papers 1621, Institute of Labor Economics (IZA).
    19. Giuseppe Nicoletti & Andrea Bassanini & Ekkehard Ernst & Sébastien Jean & Paulo Santiago & Paul Swaim, 2001. "Product and Labour Markets Interactions in OECD Countries," OECD Economics Department Working Papers 312, OECD Publishing.
    20. Rünstler, Gerhard, 2002. "The information content of real-time output gap estimates, an application to the euro area," Working Paper Series 182, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Andrea Brandolini & Piero Casadio & Piero Cipollone & Marco Magnani & Alfonso Rosolia, 2007. "Employment Growth in Italy in the 1990s: Institutional Arrangements and Market Forces," AIEL Series in Labour Economics, in: Nicola Acocella & Riccardo Leoni (ed.), Social Pacts, Employment and Growth. A Reappraisal of Ezio Tarantelli’s Thought, edition 1, chapter 4, pages 31-68, AIEL - Associazione Italiana Economisti del Lavoro.
    2. Alfonso Rosolia & Roberto Torrini, 2007. "The generation gap: relative earnings of young and old workers in Italy," Temi di discussione (Economic working papers) 639, Bank of Italy, Economic Research and International Relations Area.
    3. Antonio Bassanetti & Michele Caivano & Alberto Locarno, 2010. "Modelling Italian potential output and the output gap," Temi di discussione (Economic working papers) 771, Bank of Italy, Economic Research and International Relations Area.
    4. Roberto Torrini, 2015. "Labour, Profit and Housing Rent Shares in Italian GDP: Long-Run Trends and Recent Patterns," Politica economica, Società editrice il Mulino, issue 3, pages 275-314.
    5. Anna Zolotareva & Anastasia Kireeva & Tatiana Malinina, 2012. "Special Forms of Support of the Innovation Activity in Russia," Published Papers 171, Gaidar Institute for Economic Policy, revised 2013.
    6. Libero Monteforte & Giordano Zevi, 2016. "An inquiry into manufacturing capacity in Italy after the double-dip recession," Questioni di Economia e Finanza (Occasional Papers) 302, Bank of Italy, Economic Research and International Relations Area.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cayen, Jean-Philippe & van Norden, Simon, 2005. "The reliability of Canadian output-gap estimates," The North American Journal of Economics and Finance, Elsevier, vol. 16(3), pages 373-393, December.
    2. Xiaoshan Chen & Terence Mills, 2012. "Measuring the Euro area output gap using a multivariate unobserved components model containing phase shifts," Empirical Economics, Springer, vol. 43(2), pages 671-692, October.
    3. Rodríguez, Gabriel, 2009. "Estimating Output Gap, Core Inflation, and the NAIRU for Peru," Working Papers 2009-011, Banco Central de Reserva del Perú.
    4. Tommaso Proietti & Alberto Musso & Thomas Westermann, 2007. "Estimating potential output and the output gap for the euro area: a model-based production function approach," Empirical Economics, Springer, vol. 33(1), pages 85-113, July.
    5. Gabriel RODRIGUEZ, 2010. "Estimating Output Gap, Core Inflation, And The Nairu For Peru, 1979-2007," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
    6. repec:hal:spmain:info:hdl:2441/7349 is not listed on IDEAS
    7. Philippe Moës, 2006. "The production function approach to the Belgian output gap, estimation of a multivariate structural time series model," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 49(1), pages 59-91.
    8. Paolo Guarda, 2002. "Potential output and the output gap in Luxembourg: some alternative methods," BCL working papers 4, Central Bank of Luxembourg.
    9. Gian Luigi Mazzi & Frédéric Reynès & Matthieu Lemoine & Paola Veroni, 2008. "Real Time Estimation of Potential Output and Output Gap for the Euro-Area : Comparing Production Function with Unobserved Components and SVAR Approaches," SciencePo Working papers Main hal-01027422, HAL.
    10. Sergey Sinelnikov-Murylev & Sergey Drobyshevsky & Maria Kazakova & Michael Alexeev, 2016. "Decomposition of Russia's GDP Growth Rates," Research Paper Series, Gaidar Institute for Economic Policy, issue 167P, pages 123-123.
    11. Rafael Doménech & Víctor Gómez, 2005. "Ciclo económico y desempleo estructural en la economía española," Investigaciones Economicas, Fundación SEPI, vol. 29(2), pages 259-288, May.
    12. Luis Gonzalo Llosa & Shirley Miller, 2004. "Using Additional Information in Estimating the Output Gap in Peru: a Multivariate Unobserved Component Approach," Money Affairs, CEMLA, vol. 0(1), pages 57-82, January-J.
    13. Ms. Silvia Sgherri, 2005. "Long-Run Productivity Shifts and Cyclical Fluctuations: Evidence for Italy," IMF Working Papers 2005/228, International Monetary Fund.
    14. Alvaro Aguiar & Manuel Martins, 2005. "Testing the significance and the non-linearity of the Phillips trade-off in the Euro Area," Empirical Economics, Springer, vol. 30(3), pages 665-691, October.
    15. Álvarez, Luis J. & Gómez-Loscos, Ana, 2018. "A menu on output gap estimation methods," Journal of Policy Modeling, Elsevier, vol. 40(4), pages 827-850.
    16. Ángel Guillén & Gabriel Rodríguez, 2014. "Trend-cycle decomposition for Peruvian GDP: application of an alternative method," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-44, December.
    17. Matthieu LEMOINE & Odile CHAGNY, 2005. "Estimating the potential output of the euro area with a semi-structural multivariate Hodrick-Prescott filter," Computing in Economics and Finance 2005 344, Society for Computational Economics.
    18. Martha López P., 2004. "Efficient policy rule for inflation targeting in Colombia," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 22(45), pages 80-115, June.
    19. Fritz, Marlon, 2019. "Steady state adjusting trends using a data-driven local polynomial regression," Economic Modelling, Elsevier, vol. 83(C), pages 312-325.
    20. Oh, Kum Hwa & Zivot, Eric & Creal, Drew, 2008. "The relationship between the Beveridge-Nelson decomposition and other permanent-transitory decompositions that are popular in economics," Journal of Econometrics, Elsevier, vol. 146(2), pages 207-219, October.
    21. Odile Chagny & Jörg Döpke, 2001. "Measures of the Output Gap in the Euro-Zone: An Empirical Assessment of Selected Methods," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(3), pages 310-332.

    More about this item

    Keywords

    Potential output; growth accounting; productivity; NAIRU; factor shares;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-540-32611-3_8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.