An input–output analysis of unit labour cost developments of the German manufacturing sector since the mid-1990s

Abstract According to empirical studies, a statistically significant factor for German exports success is high cost (or price) competitiveness. Studies by Deutsche Bundesbank recommend correcting the nominal effective exchange rate broad indicators (Deutsche Bundesbank, 1998, 2016a). This would call total economy unit labour costs. In contrast these findings, Dustmann et al. (2014) suggest using refined costs exporting manufacturing sector only, corrected inputs from other sectors and abroad in an Input–Output (IO) analysis framework. authors’ novel calculation, export-oriented of Germany experienced decrease 25% between mid-1990s 2007. We try replicate their findings. Following standard approaches calculating sectoral labours costs, abroad, consistent input–output data Federal Statistical Office World Database, did not over period analysis, developed similarly The similarity also confirmed more recent period. claim, our findings are line with recommendations