GLOBALIZATION AND PRODUCTIVITY IN THE UNITED STATES AND GERMANY.

This paper investigates the impact of globalization on productivity growth and the procyclicality of productivity growth in manufacturing industries in the United States and Germany. An increase in foreign demand for U.S. exports raises productivity growth, but less than a similar demand shock from domestic buyers. For Germany, neither international demand shocks nor exposure to international competition seem to be associated with productivity growth rates. Perhaps that is because German industries experience a smaller increase in exposure to international competition over time. This working paper can be found at the US Federal Reserve Board's International Finance Discussion Papers. You can access this by going to <http://www.federalreserve.gov/pubs/workingpapers.htm>