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Information Technology and Productivity Growth

German Trends and OECD Comparisons Theo S. Eicher, Professor and Robert R. Richards Distinguished Scholar, University of Washington, Seattle, US and Affiliate Professor, Ludwig-Maximilians University, Munich, Germany and Thomas Strobel, Economist, Department of International Institutional Comparisons, Ifo Institute for Economic Research, Munich, Germany
Theo S. Eicher and Thomas Strobel present an industry-level account of the recent changes in German productivity growth and compare the trends to Europe and the US. The specific focus is on how differential investments in information and communication technologies (ICT) affected the economic performance of these economies.
Extent: 112 pp
Hardback Price: $124.00 Web: $111.60
Publication Date: 2009
ISBN: 978 1 84844 091 3
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  • Economics and Finance
  • Industrial Economics
  • Innovation and Technology
  • Technology and ICT
Theo S. Eicher and Thomas Strobel present an industry-level account of the recent changes in German productivity growth and compare the trends to Europe and the US. The specific focus is on how differential investments in information and communication technologies (ICT) affected the economic performance of these economies.

Not all industrialized countries shared the economic fortunes that ICT presented to the US economy. While the US experienced successive accelerations in its trend growth in 1995 and again in 2000, Germany experienced dual reductions in labor productivity growth. Some European economies fared better and others even worse than Germany. Since productivity is the ultimate determinant of living standards, the authors examine the sources of these productivity differentials. They also present a new German growth accounting database that utilizes unique ICT investment data, sourced directly from the industries, to place their findings into an international context.

This book is targeted at economists and policymakers alike, and is designed to provide clear guidance for those interested in industrial policy and statistical account methods.
‘Eicher and Strobel have traced the recent US productivity acceleration and the German productivity slump to substantially higher levels of investment in information and communications technology in the United States. They have demonstrated how this investment interacts with the intensity of skills and in research and development to generate productivity growth. This is an important contribution to our understanding of the ongoing divergence of productivity in Europe and the United States.’
– Dale Jorgenson, Harvard University, US

‘This book is an important addition to an emerging literature on the drivers of growth during the past two decades, notably the role of information and communication technology and productivity. Now that global growth has come under severe pressure, it is even more important to understand the dynamics of technological change and productivity. The international comparative perspective, notably between Germany and the United States, provides a useful perspective to draw lessons for future policy regimes supporting innovation.’
– Bart van Ark, The Conference Board and University of Groningen, The Netherlands

‘This timely book provides a detailed description of the sources of economic growth in Germany since unification in 1991. While the ICT revolution propelled productivity growth in the US, growth in Europe’s biggest economy remained sluggish. Based on a new industry-level database, the authors provide an in-depth analysis of the German growth experience focusing on the role of skills, ICT-investments, software and R&D. This industry perspective on growth provides useful insights into the barriers and drivers of economic growth.’
– Marcel Timmer, University of Groningen, The Netherlands

‘This book provides a detailed look at a number of the more pressing and important issues in the study of economic growth today. Their analysis of the importance of new technologies, skills and innovation for growth provide a range of novel insights into the reasons for lagging productivity growth in Germany and other European countries compared to the US.’
– Robert Inklaar, University of Groningen, The Netherlands
Contents: 1. Introduction 2. Deriving New Economy Data at the Industry Level 3. Industry Origins of the US Productivity Accelerations and Germany’s Productivity Slump 4. ICT Intensity and Productivity Growth: An International Comparison 5. Information and Communication Technology (ICT) and Productivity: Software Investments as the Decisive Driver 6. Education and ICT Investment Complementarities 7. Industry Productivity, R&D Intensity, and ICT Investment References Index