The UK Economy

1994 ◽  
Vol 150 ◽  
pp. 10-28
Author(s):  
Carry Young
Keyword(s):  
Growth Rate ◽  
Productivity Growth ◽  
Price Inflation ◽  
Capital Costs ◽  
Exchange Rate Mechanism ◽  
Labour Costs ◽  
Unit Labour Costs ◽  
Retail Prices ◽  
The Uk ◽  
Rate Mechanism

Price inflation in the UK economy has remained below the expectations of most commentators since sterling left the exchange-rate mechanism in September 1992. Latest estimates of inflation indicate that retail prices are now growing at an annual underlying rate of 2 per cent; the lowest growth rate for 27 years. This impressive performance is being sustained by very low growth in labour and capital costs, unit labour costs are estimated to have fallen by 1/2 per cent in the last year, as fast productivity growth has been combined with low growth in earnings.

International Differences in Manufacturing Unit Labour Costs

1995 ◽  
Vol 154 ◽  
pp. 85-110 ◽  
Author(s):  
Mary O'Mahony
Keyword(s):  
Productivity Growth ◽  
The United States ◽  
Minor Role ◽  
Nominal Wage ◽  
Market Exchange ◽  
National Accounts ◽  
Competitive Position ◽  
Labour Costs ◽  
Unit Labour Costs ◽  
Time Changes

This article presents measures o f competitiveness in manufacturing comparing Britain to Germany, France and the United States. Data from the National Accounts and the Census of Production are combined to derive new estimates of relative unit labour costs for a number of manufacturing industries. The results show that British manufacturing had a competitive advantage over Germany and France in 1993. This arose primarily from the devaluation of Sterling and followed a period, from 1989 to 1992, when unit labour costs in British manufacturing were generally close to those in Germany and France. Unit labour costs in American manufacturing, however, were considerably lower than in the European countries in 1993. The results by industry show that Britain performs relatively poorly in much of the engineering sector while being relatively more competitive in consumer goods industries. Over time changes in the market exchange rates and nominal wage inflation have large impacts on the relative competitive position of total manufacturing in the four countries whereas productivity growth plays a minor role. However, at the industry level productivity growth is important. In the face of similar movements in relative nominal wages across industries, differences in productivity performance distinguish those British industries which gained ground over their rivals abroad from those whose competitive position worsened.

One Foot In and One Foot Out, 1990–1997

2020 ◽  
pp. 201-226
Author(s):  
Stephen Wall
Keyword(s):  
Exchange Rate ◽  
Conservative Party ◽  
Maastricht Treaty ◽  
German Reunification ◽  
Exchange Rate Mechanism ◽  
Opt Out ◽  
The Uk ◽  
The Right ◽  
Rate Mechanism ◽  
The Eu

John Major had none of Thatcher’s reservations about German reunification and wanted to put Britain at the heart of Europe. But he faced growing Euroscepticism inside the Conservative Party. At Maastricht, Major secured for the UK the right to opt out or, later to opt in, to the proposed European single currency. The significance of this opt out for the longer term British sense of detachment from the rest of the EU was not then obvious. The ratification of the Maastricht Treaty in the UK, and the Major government, both nearly foundered, when the UK was forced out of the Exchange Rate Mechanism in 1991. Europe became a toxic issue in the Conservative Party. Mad Cow Disease triggered a policy of non-cooperation by the UK with the rest of the EU. Major championed the enlargement of the EU to include the newly freed countries of eastern and central Europe.

Europe's monetary malaise: international institutions and domestic policy commitments

1996 ◽  
Vol 22 (3) ◽  
pp. 257-273 ◽  
Author(s):  
Wayne Sandholtz
Keyword(s):  
Exchange Rate ◽  
International Institutions ◽  
European Monetary System ◽  
Central Banks ◽  
European Monetary ◽  
Exchange Rate Mechanism ◽  
Monetary System ◽  
The Uk ◽  
Belgian Franc ◽  
Rate Mechanism

A yearlong nightmare for the European Monetary System (EMS) began in September 1992. Amid name–calling, finger–pointing, and hand–wringing, the British pound and the Italian lira dropped out of the Exchange Rate Mechanism (ERM). In succeeding months, virtually every other ERM currency came under attack.1 Three of them—the Spanish peseta, the Portuguese escudo, and the Irish punt—devalued within the system. Three others—the French franc, the Belgian franc, and the Danish krone—avoided devaluation, but only at the price of recurrent and costly rounds of intervention by multiple central banks. Finally, in August 1993, the defenders of the parities surrendered. The twelve EMS countries agreed to expand the fluctuation margins from 2.25 per cent on either side of parity (6 per cent for Spain, Portugal and the UK) to 15 per cent on either side of parity. The wider margins eliminated the potential for speculative attacks, but left the system only the thinnest veneer of exchange rate coordination. This article seeks not to assess the causes of the crisis but rather to explain why the EMS governments did not defuse it with a realignment—the mechanism built into the ERM for precisely such occasions.

Forming Sources of Long-run Growth: How to Understand Them?

2014 ◽  
pp. 4-20 ◽  
Author(s):  
G. Idrisov ◽  
S. Sinelnikov-Murylev
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Economic Policy ◽  
Business Cycle ◽  
Capital Markets ◽  
Productivity Growth ◽  
Government Spending ◽  
Long Run ◽  
Accelerate Growth ◽  
Budget Institutions

The paper analyzes the inconsequence and problems of Russian economic policy to accelerate economic growth. The authors consider three components of growth rate (potential, Russian business cycle and world business cycle components) and conclude that in order to pursue an effective economic policy to accelerate growth, it has to be addressed to the potential (long-run) growth component. The main ingredients of this policy are government spending restructuring and budget institutions reform, labor and capital markets reforms, productivity growth.

scholarly journals Evolutionary economics: Crisis, transformation and metamorphosis

2021 ◽  
pp. 1-8
Author(s):  
Milan Zeleny
Keyword(s):  
Growth Rate ◽  
Productivity Growth ◽  
Driving Force ◽  
Evolutionary Economics ◽  
Regional Economies ◽  
Economic Evolution ◽  
Economic Sectors ◽  
Advanced Economies ◽  
First Time

Most world economies are undergoing fundamental transformations of economic sectors, shifting their employed workforce through the secular sequence of (1. Agriculture⟶2. Industry⟶3. Services⟶4. Government). The productivity growth rate is the driving force. Most advanced economies have reached the final stages of the sequence. Assorted recessions, crises and stagnations are simply cofluent, accompanying phenomena. Crises might be cyclical, but economic evolution is unidirectional. Traditional economics can hardly distinguish phenomena of crisis from those of the transformation. Because there is no “fifth sector”, some economies are entering the phase of metamorphosis, for the first time in history. Metamorphosis is manifested through deglobalization, relocalization and autonomization of local and regional economies. We are entering the Age of Entrepreneurship.

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