WAGES AND PRODUCTIVITY GROWTH IN THE NORDIC COUNTRIES

The study examines growth in productivity and real wages in four Nordic countries, viz. Denmark, Finland, Norway and Sweden, thus extending Gordon's (1987) analysis concentrating on the U.S., Japan and Europe. The results confirm certain key findings of Gordon's (1987) study. In particular, the cyclically adjusted measures of productivity growth confirm the slowdown in productivity growth in the mid-1970s. Gordon's finding that there are considerable differences across the different sectors of the economy is similarly supported. As far as country-specific development in productivity growth is concerned, the results imply that there are considerable inter-country differences which Gordon's study fails to reveal. In this respect Gordon's estimates for 'Europe', if taken at face value, can be somewhat misleading. Furthermore, contrary to Gordon, the results suggest that the decline in the underlying productivity trend in the 1970s was not permanent but showed a recovery in the 1980s.