Labor and Investment Demand at the Firm Level: A Comparison of French, German and U.S. Manufacturing, 1970-79

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We investigate how labor and investment demand at the firm level (gross as well as net and replacement investment separately) differs in French, German and U.S. manufacturing, and has changed since the 1974-75 crisis. We use three consistent panel data samples of large firms for1970-79, and rely on simple models of the accelerator-profits type. We find that the accelerator effects and the profits effects did not vary much between 1970-73 and 1976-79, and were quite comparable in the three countries, the former being of a more permanent nature and the latter more transitory.To a large extent these effects account for the important changes and differences in labor and investment demand between the two subperiods and across the three countries.

Published: Dormont, Brigitte and Jacques Mairesse. "Labor and Investment at the Firm Level: A Comparison of French, German and U.S. Manufacturing," European Economic Review, Vo. 28, No. 1-2, June-July 1985, pp. 201-231.

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