TFP Growth in British and German Manufacturing, 1950-96

28 Pages Posted: 11 Dec 2001

See all articles by Nicholas Crafts

Nicholas Crafts

University of Warwick; Centre for Economic Policy Research (CEPR)

Terence C. Mills

Loughborough University - Department of Economics

Date Written: November 2001

Abstract

The Paper considers the accuracy of traditional TFP growth estimates using an econometric methodology which takes account of scale economies, fixed factors of production and adjustment costs to reveal underlying 'pure technological change'. The results suggest that these biases vary substantially over time but do not impact heavily on Anglo-German comparisons. In both countries the early post-war years are a period when adjustment costs from a rising supply price of capital goods hold down TFP growth below that which could have accrued from pure technological progress. As might be expected, this problem largely disappeared in the later globalization period.

Keywords: Total factor productivity, manufacturing, adjustment costs

JEL Classification: N14, O47

Suggested Citation

Crafts, Nicholas and Mills, Terence C., TFP Growth in British and German Manufacturing, 1950-96 (November 2001). Available at SSRN: https://ssrn.com/abstract=293625

Nicholas Crafts (Contact Author)

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Terence C. Mills

Loughborough University - Department of Economics ( email )

York House
Loughborough LE11 3TU
Great Britain
+44 1509 222703 (Phone)
+44 1509 223910 (Fax)

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