Wages and GDP in Britain and Germany 1871-1938

Discussions on the economic history of the nations taking part in WW2, from the recovery after the depression until the economy at war.
Cerdic
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Wages and GDP in Britain and Germany 1871-1938

Post by Cerdic » 23 Jul 2014 19:04

Throughout the period 1871-1938, the average British worker was better off than the average
German worker, but there were significant differences between major sectors. For the aggregate
economy, the real wage gap was about the same as the labour productivity gap, but again there
were important sectoral differences.
read more:

http://www.coll.mpg.de/pdf_dat/2009_18online.pdf

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Guaporense
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Re: Wages and GDP in Britain and Germany 1871-1938

Post by Guaporense » 26 Dec 2014 21:18

I read that paper a couple of years ago. Though I think there were some mistakes on the 1937 benchmark calculations.
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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Guaporense
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Re: Wages and GDP in Britain and Germany 1871-1938

Post by Guaporense » 04 Feb 2015 08:06

I actually redid the calculations of the paper, apparently, they don't know how to estimate PPPs, they made the same mistake twice: they used the German basket weights to calculate a British basket, twice, hence, they arrived at incorrect conclusions twice. Although the 1937 result is the most distorted because the relative prices became very different due to Germany's economic autarky.

These are:

1905: German wages were 80.1% of UK's. (paper says 78.7%)
1937: German wages were 107.5% of UK's (paper says 85.2%)

See how I computed these numbers:
http://forum.axishistory.com/viewtopic. ... s#p1720590
"In tactics, as in strategy, superiority in numbers is the most common element of victory." - Carl von Clausewitz

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