Manufacturing and the Convergence Hypothesis: What the Long-Run Data Show

The commonly accepted chronology for comparative productivity levels based on GDP data does not apply to the manufacturing sector, where there is evidence of a much greater degree of stationarity of comparative labour productivity performance among the major industrialized countries of Germany, the United Kingdom and the United States. These results for manufacturing suggest that convergence of GDP per worker must have occurred through trends in other sectors and through compositional effects of structural change. The persistent large labour productivity gap between the US and Europe cannot be explained simply by differences in capital per worker, but is related to technological choice.

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