Ray J. Barrell, Catherine Guillemineau, and Dawn Holland Barrell, economists at the National Institute of Social and Economic Research in the United Kingdom, studied the growth rates of Germany and the United Kingdom from 1993 to 2005. Prior to 1993, both countries grew at about the same rate. After 1993, the United Kingdom grew at an average annual rate of about 3%, while Germany€™s growth rate fell to an average rate of 1.5%. The following table gives a summary of their results:

Based on the table, discuss why the German economy grew more slowly after 1993 than did the British economy.

Transcribed Image Text:

Germany United Kingdom Total GDP growth Labor growth Capital growth Total factor productivity growth 1.5% -0.8 1.2 1.1 3% 0.8 0.4 1.9