Studies of Economic Change

Trends

To confirm the assumptions of decreasing economic growth rates and increasing productivity rates and to forecast the future trends concerning the unemployment rate it is at first necessary to analyse the trends of the past and present. This has to be done by the historic comparison of a variety of industrialised countries and by the present comparison of nations which are in different phases of their economic development. The analysis at this place is limited to Germany because of the author's limited resources.

Even if this analysis might not suffice scientific formalism the results are exact enough to confirm the assumptions and to dare to have a look into the future by extrapolating the actual trends. It can be critised

• that the labour productivity is based on figures which represent the average of 10 years
• to compensate that the total annual hours worked are indirectly based on the weekly hours worked and the vacation days agreed by the collective bargaining parties,
• and that the total annual gross domestic product is divided by the number of employed and self-employed,
• furthermore that the sample is not representative enough to generalise the results.

It can be shown that during the 60th to 80th of the last century the productivity rates were about 1% higher than the economic growth rates. Later on until now the productivity and the growth rates increased on a lower level with only a little distance. The assumptions could therefore be proved wrong. But furthermore it can also be shown that since the 90th of the last century no reductions of hours worked and only little wage increases were in effect. Consequently the economy was not confronted with high efforts which are necessary to induce an evolutionary development. But the transfer of the ideas of the evolution theory is an essential assumption. And the results are correct if the assumptions are in effect.

It is assumed that the increase of the productivity is about 1% above the increase of the economic growth at the beginning of the forecast. As the economic growth is characterised by declining growth rates and the increase of the productivity seams to be limited as well we assume further that both parameters continue in a linear way since then.

The next chapter is about the consequences of the demographic development. But the chapter after the next picks up the determined productivity and economic growth rates to forecast the unemployment rate.