The Anglo-German productivity puzzle, 1895-1935: a restatement and a possible resolution
Recent research on international productivity comparisons has focused on the discrepancies between benchmark comparisons and time series extrapolations from other benchmarks. For a 1907 benchmark, Stephen Broadberry and Carsten Burhop (2007) find German manufacturing to be only slightly ahead of Britain. Their backward extrapolation from a broader 1935 benchmark is consistent with their 1907 benchmark, provided that a traditional but disputed industrial production series of Walther Hoffmann (1965) is used. If they instead employ a revised series by Ritschl (2004), they obtain an implausibly high productivity lead of 50 percent, evidence that they therefore discard. The present paper revisits this Anglo-German productivity puzzle and suggests a resolution. Drawing on Rainer Fremdling and Reiner Staeglin (2003), I present further revisions to Germany’s industrial production series. I also calculate a revised 1907 productivity benchmark. Both the revised extrapolation and the revised benchmark indicate that on the eve of World War I, German manufacturing productivity was clearly ahead of Britain.
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- Ritschl, Albrecht, 2004.
"Spurious growth in German output data, 1913 1938,"
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"Manufacturing and the Convergence Hypothesis: What the Long Run Data Show,"
CEPR Discussion Papers
708, C.E.P.R. Discussion Papers.
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- Broadberry, Stephen & Burhop, Carsten, 2007. "Comparative Productivity in British and German Manufacturing Before World War II: Reconciling Direct Benchmark Estimates and Time Series Projections," The Journal of Economic History, Cambridge University Press, vol. 67(02), pages 315-349, June.
- R. J. Overy, 1975. "Cars, Roads, and Economic Recovery in Germany, 1932–8," Economic History Review, Economic History Society, vol. 28(3), pages 466-483, 08.
- Broadberry S. N. & Ritschl A., 1995. "Real Wages, Productivity, and Unemployment in Britain and Germany during the 1920's," Explorations in Economic History, Elsevier, vol. 32(3), pages 327-349, July.
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