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Capital, labour and productivity: What role do they play in the potential GPD weakness of France, Germany and Italy?

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  • Bassanetti, Antonio
  • Döpke, Jörg
  • Torrini, Roberto
  • Zizza, Roberta

Abstract

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 made by labour input. Where similarities can be found, however, are in the slowdown of accumulation activity and in the pronounced worsening of total factor productivity. The paper is rounded out by estimates of some measures of wage pressures and of 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

  • Bassanetti, Antonio & Döpke, Jörg & Torrini, Roberto & Zizza, Roberta, 2006. "Capital, labour and productivity: What role do they play in the potential GPD weakness of France, Germany and Italy?," Discussion Paper Series 1: Economic Studies 2006,09, Deutsche Bundesbank.
  • Handle: RePEc:zbw:bubdp1:4246
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    File URL: https://www.econstor.eu/bitstream/10419/19637/1/200609dkp.pdf
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    References listed on IDEAS

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    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.
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    8. 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.
    9. 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.
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    12. Giuseppe Nicoletti & Stefano Scarpetta, 2003. "Regulation, productivity and growth: OECD evidence," Economic Policy, CEPR;CES;MSH, vol. 18(36), pages 9-72, April.
    13. Estevão, Marcello & Nargis, Nigar, 2005. "Structural Labor Market Changes in France," IZA Discussion Papers 1621, Institute for the Study of Labor (IZA).
    14. Jean Pisani-Ferry, 2003. "The Surprising French Employment Performance: What Lessons?," CESifo Working Paper Series 1078, CESifo Group Munich.
    15. 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.
    16. Olivier Blanchard, 2006. "European unemployment: the evolution of facts and ideas," Economic Policy, CEPR;CES;MSH, vol. 21(45), pages 5-59, January.
    17. 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.
    18. 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.
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    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.

    More about this item

    Keywords

    Potential output; growth accounting; productivity; NAIRU; factor shares;

    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

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