This study compares manufacturing output and productivity levels between France and Germany since the German unification. Taking as a benchmark the year 1997, the relative price level is calculated with the industry-of-origin method. The French level of productivity in terms of labour, capital and their combination is below the German one in 1997. However, with respect to cost competitiveness, France takes advantage of lower unit labour costs than Germany. Over the 90s, the factor productivity catch-up France achieved is significant. Disparities between the eastern and the western Länder that resulted in a lesser productivity growth remain large. But the commitment of the east into more high-tech production processes using skilled labour could turn in the future into competitiveness gains for all Germany.
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Paper provided by CEPII research center in its series Working Papers with number
2001-14.
Find related papers by JEL classification: E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General 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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