Missing growth measurement in Germany

Sven Schreiber and Vanessa Schmidt

No 2021/7, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: Using detailed establishment-level micro data, this paper analyzes for the German case the hypothesis by Aghion, Bergeaud, Boppart, Klenow, and Li (2019), stating that officially published figures for real output growth would be systematically understated. The effect rests on overstated inflation estimates due to imputed prices for disappearing goods and services varieties, where measurable plant entry and exit dynamics play a crucial rule. Our main results regarding understated real output growth lie in the range of 0:39 to 0:54 average annual percentage points for 1998-2016, which is quite closely in line with existing findings for France, the USA, and Japan (in different periods). We also find that services sectors appear most affected, and that the effect in East Germany is somewhat larger. We investigate different market share proxies, provide additional robustness analysis and also discuss limitations of the approach.

Keywords: creative destruction; price imputation; inflation measurement (search for similar items in EconPapers)
JEL-codes: E31 O47 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-eec, nep-gro and nep-mac
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https://www.econstor.eu/bitstream/10419/231517/1/1750985632.pdf (application/pdf)

Related works:
Journal Article: Missing growth measurement in Germany (2022)
Working Paper: Missing growth measurement in Germany (2020)
Working Paper: Missing growth measurement in Germany (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:20217

DOI: 10.17169/refubium-29566

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