Spurious Growth in German Output Data, 1913-1938

37 Pages Posted: 4 May 2004  

Albrecht Ritschl

London School of Economics & Political Science (LSE) - Department of Economic History; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2004

Abstract

A substantial body of research agrees that unit wage cost in the industrialized economies increased substantially after World War I. For Germany, the popular industrial output estimate of Hoffmann (1965) is partly based on the assumption of constant wage shares, and shows rather high growth of the German inter-war economy relative to 1913. This paper constructs alternative estimates for the affected metal-working sectors. It finds far lower output levels and growth, consistent with the standard evidence of rising labor shares after World War I. The change is strong enough to remove the growth bias also from Hoffmann's figures of overall industry and the aggregate economy. After correcting for spurious growth in metal-processing industry, Hoffmann's output estimates are broadly in line with the contemporary output and national income statistics.

Keywords: Index of production, wage cost, labor share

JEL Classification: N14, N64, E24, E65

Suggested Citation

Ritschl, Albrecht, Spurious Growth in German Output Data, 1913-1938 (May 2004). Available at SSRN: https://ssrn.com/abstract=539402 or http://dx.doi.org/10.2139/ssrn.539402

Albrecht Ritschl (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economic History ( email )

Houghton Street
London WC2A 2AE
United Kingdom

HOME PAGE: http://personal.lse.ac.uk/ritschl/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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