Unraveling the Productivity Paradox: Evidence for Germany

Désirée Christofzik, Elstner Steffen (), Lars Feld and Christoph Schmidt
Additional contact information
Elstner Steffen: German Supreme Audit Institution, Berlin, Germany

German Economic Review, 2024, vol. 25, issue 3, 165-207

Abstract: Despite massive digitization efforts, the German economy has experienced a marked slowdown in its productivity growth. This paper empirically analyzes three prominent explanations for this development. First, using a novel quarterly utilization-adjusted total factor productivity measure for the German economy, we find that the slowdown in U.S. productivity growth since the mid-2000s had only a negligible impact on the German productivity trend. Second, the structural shift towards services in the German economy explains a sizeable share of the weaker aggregate productivity gains. This transformation process is associated with a strong labor market performance. And third, employing a novel identification procedure, we show that technological progress in the German information and communication technology (ICT) producing sector stimulates both, aggregate output and employment growth. Its effect on aggregate productivity is, however, small.

Keywords: labor productivity; technology shocks; digitization; structural VARs; purified TFP (search for similar items in EconPapers)
JEL-codes: C32 E24 O30 O40 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/ger-2023-0094 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Unraveling the Productivity Paradox: Evidence for Germany (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:germec:v:25:y:2024:i:3:p:165-207:n:1001

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ger/html

DOI: 10.1515/ger-2023-0094

Access Statistics for this article

German Economic Review is currently edited by Peter Egger, Almut Balleer, Jesus Crespo-Cuaresma, Mario Larch, Aderonke Osikominu and Georg Wamser

More articles in German Economic Review from De Gruyter
Bibliographic data for series maintained by Peter Golla ().