Spurious Growth in German Output Data, 1913-1938

39 Pages Posted: 9 Jul 2004

See all articles by Albrecht Ritschl

Albrecht Ritschl

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

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Date Written: June 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 estimates of Hoffmann (1965) are partly based on the assumption of constant wage shares, and show rather high growth of the German inter-war economy relative to 1913. This Paper constructs alternative estimates for the affected metal-working sectors, and finds far lower output levels and growth. 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

JEL Classification: N14

Suggested Citation

Ritschl, Albrecht, Spurious Growth in German Output Data, 1913-1938 (June 2004). CEPR Discussion Paper No. 4429. Available at SSRN: https://ssrn.com/abstract=563312

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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