Growth and Productivity in the Finnish Trade Industry, 1975–2003: A National Comparative Perspective

The objective of this paper is to compare the historical growth and productivity development in Finnish trade with that of the rest of the economy. This topic is important since the share of services in production is ever increasing and the so-called Baumol's Disease predicts that overall productivity growth will slow down as resources shift to service industries. Economic growth shifted into a faster gear after the middle of the 1990s compared to earlier periods. Aggregate labour productivity change slowed down due to an absence of contributions from capital deepening but aggregate multi-factor productivity growth stayed level. For the trade industries the post-recession period looked good. Trade joined the growth clubs in value added, labour productivity and multi-factor productivity. Unit labour cost growth was moderate.