IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/895.html
   My bibliography  Save this paper

Comparative Productivity in East and West German Manufacturing Before Reunification

Author

Listed:
  • Van Ark, Bart

Abstract

We provide comparisons between East and West Germany before reunification of relative levels of output per hour in manufacturing industries. The comparisons are based on the industry of origin approach which makes use of information on value added and employment derived from production statistics. Output is converted to a common currency with unit value ratios which are based on values at producer prices for individually matched products. This study shows that for the manufacturing sector as a whole, value added per hour worked in East Germany was 28.6% of the level in West Germany in 1987. The comparative productivity performance in food products and beverages and in chemicals in East Germany is well above this average, but the productivity level in machinery and equipment is below 20% of the West German level. The study deals with the problems involved with quality differences, and it discusses the reasons for the more unfavourable performance of East Germany when based on comparisons of value added rather than gross output. We conclude with a discussion of the changes in comparative output and productivity performance in the past five decades. It appears that even after adjustments of the East German time series on real output in manufacturing to a factor cost standard, the comparative productivity level of East Germany in 1950 extrapolated backwards from 1987 would tend to be unrealistically low compared to earlier benchmarks. This calls for a more detailed study of East German growth between 1947 and 1990 as well as for more historical benchmark comparisons between the two regions.

Suggested Citation

  • Van Ark, Bart, 1994. "Comparative Productivity in East and West German Manufacturing Before Reunification," CEPR Discussion Papers 895, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:895
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=895
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    2. Benassy, Jean-Pascal, 1995. "Money and wage contracts in an optimizing model of the business cycle," Journal of Monetary Economics, Elsevier, vol. 35(2), pages 303-315, April.
    3. Giovannini, Alberto, 1989. "Uncertainty and liquidity," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 239-258, March.
    4. Gray, Jo Anna, 1976. "Wage indexation: A macroeconomic approach," Journal of Monetary Economics, Elsevier, vol. 2(2), pages 221-235, April.
    5. Hairault, Jean-Olivier & Portier, Franck, 1993. "Money, New-Keynesian macroeconomics and the business cycle," European Economic Review, Elsevier, pages 1533-1568.
    6. Katz, Eliakim & Rosenberg, Jacob, 1983. "Inflation Variability, Real-Wage Variability and Production Inefficiency," Economica, London School of Economics and Political Science, vol. 50(200), pages 469-475, November.
    7. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, pages 647-666.
    8. Sims, Christopher A, 1994. "A Simple Model for Study of the Determination of the Price Level and the Interaction of Monetary and Fiscal Policy," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), pages 381-399.
    9. Alberto Giovannini, 1987. "Uncertainty and Liquidity," NBER Working Papers 2296, National Bureau of Economic Research, Inc.
    10. Rankin, Neil, 1994. "Monetary uncertainty in discrete-time utility-of-money models," Economics Letters, Elsevier, vol. 44(1-2), pages 127-132.
    11. Grinols, Earl L. & Turnovsky, Stephen J., 1993. "Risk, the financial market, and macroeconomic equilibrium," Journal of Economic Dynamics and Control, Elsevier, pages 1-36.
    12. Stulz, ReneM., 1986. "Interest rates and monetary policy uncertainty," Journal of Monetary Economics, Elsevier, vol. 17(3), pages 331-347, May.
    13. Lucas, Robert E, Jr & Stokey, Nancy L, 1987. "Money and Interest in a Cash-in-Advance Economy," Econometrica, Econometric Society, vol. 55(3), pages 491-513, May.
    14. Bianconi, Marcelo, 1992. "Monetary growth innovations in a simple cash-in-advance asset-pricing model," European Economic Review, Elsevier, vol. 36(8), pages 1501-1521, December.
    15. Sorensen, Jan Rose, 1992. " Uncertainty and Monetary Policy in a Wage Bargaining Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(3), pages 443-455.
    16. Evans, George W, 1989. "The Conduct of Monetary Policy and the Natural Rate of Unemployment: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(4), pages 498-507, November.
    17. Dixon, Huw David & Rankin, Neil, 1994. "Imperfect Competition and Macroeconomics: A Survey," Oxford Economic Papers, Oxford University Press, vol. 46(2), pages 171-199, April.
    18. Driffill, John & Mizon, Grayham E. & Ulph, Alistair, 1990. "Costs of inflation," Handbook of Monetary Economics,in: B. M. Friedman & F. H. Hahn (ed.), Handbook of Monetary Economics, edition 1, volume 2, chapter 19, pages 1013-1066 Elsevier.
    19. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
    20. Deaton, Angus, 1992. "Understanding Consumption," OUP Catalogue, Oxford University Press, number 9780198288244.
    21. Gertler, Mark & Grinols, Earl, 1982. "Monetary randomness and investment," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 239-258.
    22. Fischer, Stanley, 1977. "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 191-205, February.
    23. Lars E. O. Svensson, 1986. "Sticky Goods Prices, Flexible Asset Prices, Monopolistic Competition, and Monetary Policy," Review of Economic Studies, Oxford University Press, vol. 53(3), pages 385-405.
    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. repec:dgr:rugggd:200362 is not listed on IDEAS
    2. Castaldi, Carolina & Sapio, Sandro, 2006. "The Properties of Sectoral Growth: Evidence from Four Large European Economies," GGDC Research Memorandum GD-88, Groningen Growth and Development Centre, University of Groningen.
    3. repec:dgr:rugggd:200364 is not listed on IDEAS
    4. repec:dgr:rugggd:gd-88 is not listed on IDEAS
    5. repec:dgr:rugsom:03c20 is not listed on IDEAS
    6. Bart van Ark & Erik Monnikhof & Marcel Timmer, 1999. "Prices, Quantities, and Productivity in Industry: A Study of Transition Economies in a Comparative Perspective," NBER Chapters,in: International and Interarea Comparisons of Income, Output, and Prices, pages 327-367 National Bureau of Economic Research, Inc.
    7. Inklaar, Robert & Wu, Harry & Ark, Bart van, 2003. ""Losing ground" : Japanese labour productivity and unit laboour cost manufacturing in comparison to the U.S," GGDC Research Memorandum 200364, Groningen Growth and Development Centre, University of Groningen.
    8. Robert J. Hill, 2004. "Constructing Price Indexes across Space and Time: The Case of the European Union," American Economic Review, American Economic Association, pages 1379-1410.
    9. Michaël Freudenberg & Deniz Ünal-Kesenci, 1994. "French and German Productivity Levels in Manufacturing: A Comparison Based on the Industry-of-Origin Method," Working Papers 1994-10, CEPII research center.

    More about this item

    Keywords

    Comparative Performance; Labour Productivity; Manufacturing;

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • N60 - Economic History - - Manufacturing and Construction - - - General, International, or Comparative
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    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:cpr:ceprdp:895. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.