Missing growth measurement in Germany

Using detailed establishment-level micro data, this paper analyzes the quantitative implications of the missing-growth hypothesis by Aghion, Bergeaud, Boppart, Klenow, and Li (2019) for Germany. This hypothesis states that actual growth rates of real output are systematically understated by official estimates, such that a part of real growth is missing in the published data. The underlying effect rests on overstated inflation estimates due to imputed prices for disappearing products, which is indirectly measured by plant entry and exit dynamics. Our benchmark result for the sample 1998- 2016 amounts to understated real output growth of 0:54 percentage points per year on average, which is quite closely in line with the earlier findings for the USA (0:54 p.p. 1983-2013) and for France (0:5 p.p. 2004-2015). We provide some robustness analysis and discuss limitations of the approach.