The German productivity paradox: A homegrown affair
Despite massive digitisation efforts, the German economy has experienced a marked slowdown in productivity growth. This column shows that an important share of this trend reflects the combination of strong labour market performance with the structural shift towards services in the German economy. A large part of the productivity paradox can be resolved by the observation that the notable technological progress in the ICT-producing sector tends to stimulate aggregate employment growth in step with production growth, thereby consuming its effect on aggregate productivity. The results suggest that higher productivity growth should not be the sole policy objective.
Christofzik, D., S. Elstner, L. Feld und C. Schmidt (2021), The German productivity paradox: A homegrown affair. VOX CEPR Policy Portal, 22.11.2021.