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Decomposing Growth in France, Germany and the United Kingdom Using Growth Accounting and Production Function Approaches

Published online by Cambridge University Press:  26 March 2020

Ray Barrell ,
Catherine Guillemineau  and
Dawn Holland
Ray Barrell*
Affiliation:
National Institute of Economic and Social Research
*
e-mail: [email protected]
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Abstract

This paper uses Growth Accounting and Production Function Analysis to decompose the factors behind differences in growth between the UK, France and Germany between 1992 and 2005. Most of the growth differential between the United Kingdom, Germany and France since 1993 can be explained by structural factors. The United Kingdom's higher growth has originated essentially in the finance and business sector, which is ICT-intensive. Germany's weak growth reflects in large part the aftermath of the unification shock and a continued fall in the labour input. At the same time there has been a sharp slowdown in knowledge accumulation, which seems to have restrained labour productivity growth. After EMU, the performance of German manufacturing improved relative to both France and the United Kingdom, while capital deepening became less supportive to growth because of lower investment in infrastructures and dwellings. France's higher growth relative to Germany since 1999 comes essentially from the non-tradable sectors and from a higher labour input. This may be partly related to a more significant decline in the volatility of real interest rates.

Keywords

Growth accountingProduction function estimationO40O57E23
Type
Articles
Information
National Institute Economic Review , Volume 199 , 01 January 2007 , pp. 99 - 113
Copyright
Copyright © 2007 National Institute of Economic and Social Research

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Footnotes

We would like to thank Geoff Mason, Mary O'Mahony, Kate Robinson and Martin Weale for their input into this paper. Errors remain ours despite the time input of others that have been involved.

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