The Anglo-German Productivity Puzzle, 1895-1935: A Restatement and a Possible Resolution

Recent research on international productivity comparisons has focused on the discrepancies between benchmark comparisons and time series extrapolations from other benchmarks. For a 1907 benchmark, Stephen Broadberry and Carsten Burhop (2007) find German manufacturing to be only slightly ahead of Britain. Their backward extrapolation from a broader 1935 benchmark is consistent with their 1907 benchmark, provided that a traditional but disputed industrial production series of Walther Hoffmann (1965) is used. If they instead employ a revised series by Ritschl (2004), they obtain an implausibly high productivity lead of 50 percent, evidence that they therefore discard. The present paper revisits this Anglo-German productivity puzzle and suggests a resolution. Drawing on Rainer Fremdling and Reiner Staeglin (2003), I present further revisions to Germany’s industrial production series. I also calculate a revised 1907 productivity benchmark. Both the revised extrapolation and the revised benchmark indicate that on the eve of World War I, German manufacturing productivity was clearly ahead of Britain.[...]