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RSS FeedsUK productivity growth from 2008 to 2018: weakness was structural, not cyclical
(World News Science)

 
 

3 july 2020 17:15:24

 
UK productivity growth from 2008 to 2018: weakness was structural, not cyclical
(World News Science)
 


Marko Melolinna Monetary policy makers need to know whether the economy is operating above or below its supply capacity. If the economy is operating above its supply capacity, inflation is likely to rise, and vice versa. A crucial component of supply capacity is the labour productivity trend but we cannot observe this directly. We have to estimate it. Thankfully, there are ways of splitting observed macroeconomic time series into estimated trend and cyclical components. Using a variety of methods on UK data, I find that UK productivity growth over the period 1991 to 2018 has been structurally, rather than cyclically, weak since the financial crisis. And, UK trend productivity has been...


 
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