This is a strong indication that a balanced growth process is existing, in which labour and capital complement each other in terms of their contribution to output.
With an average growth rate of 2%, labour productivity in Germany was quite close to the US figures in the nineties.5 When analysing this development, however, it has to be remembered that the productivity gains in Germany are also attributable to a fall in employment. The contrasting developments in labour productivity and employment point to an extensive substitution of labour by capital.