The UK Economy

1996 ◽  
Vol 157 ◽  
pp. 11-27 ◽  
Author(s):  
Garry Young
Keyword(s):  
Growth Rate ◽  
Output Gap ◽  
Import Prices ◽  
Inflationary Pressure ◽  
Long Run ◽  
The Uk ◽  
Trend Growth

Since the beginning of 1995 output has been growing at a quarterly rate of just under ½ per cent, slightly less than most estimates of the trend growth rate that the economy can sustain in the long run. As a consequence, there has been no progress in closing any pre-existing output gap. Over this period, there has been a lack of any domestically generated inflationary pressure. Indeed, if import prices had not risen sharply in 1995, the underlying rate of inflation would have remained below 2½ per cent.

The Implications of the Comprehensive Spending Review for the Long-Run Growth Rate: a View From the Literature

2000 ◽  
Vol 171 ◽  
pp. 94-105 ◽  
Author(s):  
Richard Kneller
Keyword(s):  
Growth Rate ◽  
Quantitative Assessment ◽  
Growth Potential ◽  
Empirical Literature ◽  
Long Run ◽  
Capital Spending ◽  
The Government ◽  
Upside Risk ◽  
Empirical Growth ◽  
Trend Growth

In 1998 the Government set out its expenditure plans for the remainder of the current Parliament in the Comprehensive Spending Review. Announced within this were large increases in expenditure on education, health and capital spending with the objective of meeting the Government‘s manifesto pledges. Yet as the recent report by the Treasury on the UK's trend rate of growth states, the expenditure plans of the CSR may also help to raise the growth potential of the economy, although no quantitative assessment of this was made. Using evidence from the empirical growth literature, this article examines the possible effects of these policies on the long-run growth rate of the economy. In general the results from the empirical literature are non-robust, but by conducting a very different style of review we are able to identify several studies from which to determine what these effects might be. Using a stylised version of the CSR we estimate that it may raise the long-run growth rate by as much as 0.1 of a percentage point per annum, although there is some sensitivity to the underlying assumptions. This appears to confirm the likelihood of modest upside risk to the Treasury's estimate of trend growth.

scholarly journals Estimating Time-Varying Long-Run Growth Rate of Russian GDP in the ARX Model with Oil Prices

2020 ◽  
Vol 15 (1) ◽  
pp. 40-63 ◽  
Keyword(s):  
Growth Rate ◽  
Growth Rates ◽  
Oil Prices ◽  
Likelihood Method ◽  
Time Varying ◽  
Arx Model ◽  
Long Run ◽  
Unobserved Components Model ◽  
The Impact ◽  
Trend Growth

The paper estimates the path of trend growth rates for Russian GDP based on an autoregressive model with exogenous variables and with a time-varying parameter of trend growth, which, by assumption, is described by a random walk process. In conditions of a high dependence of the Russian economy on commodity exports, terms of trade are used as a control exogenous variable for GDP dynamics. For the purpose of econometric estimation, the ARX model is presented as an unobserved components model and estimated using the maximum likelihood method with the Kalman filter applied. It is shown that in the first half of the 2000s the trend growth rate was at 4%, which can be interpreted as recovery growth after a transformational recession. The higher growth rates actually achieved during this period are explained by the intensive growth of world oil prices. Later, the potential for recovery growth was exhausted, and after the crisis of 2008 the rates of trend growth were remaining at the level of 2% per year for a long period of time. However, following the 2014 crisis, trend growth rates began to decline steadily, and had reached about 1% per year by the beginning of 2019, which can be interpreted as the impact of sanctions and geopolitical uncertainty on the economic development of the Russian Federation. The results of an econometric analysis of the model on household consumption and investment data also suggest that the trend growth rate is approximately 1% per year at present.

Prospects for the UK economy

2008 ◽  
Vol 203 ◽  
pp. 35-53
Author(s):  
Ehsan Khoman ◽  
Simon Kirby
Keyword(s):  
Growth Rate ◽  
Financial Markets ◽  
Household Consumption ◽  
Fourth Quarter ◽  
Gdp Growth ◽  
Preliminary Estimate ◽  
Fixed Investment ◽  
The Uk ◽  
Trend Growth

Despite the turmoil in global financial markets during the second half of 2007, UK GDP continued to grow at a robust pace. The above trend growth of 2006 continued into the first three quarters of last year and the preliminary estimate of GDP growth shows only a limited moderation into the fourth quarter of last year (figure 1). This suggests we will see a growth rate of 3.1 per cent for 2007 as a whole, a slight acceleration from 2.9 per cent in 2006. This robust growth has been sustained by household consumption and, to a lesser extent, gross fixed investment.

Implications for Growth

2019 ◽  
pp. 88-89
Author(s):  
Andrew Smithers
Keyword(s):  
Growth Rate ◽  
Capital Stock ◽  
Negative Impact ◽  
The Us ◽  
Working Age ◽  
Policy Measures ◽  
Hurdle Rate ◽  
Working Age Population ◽  
The Uk ◽  
Trend Growth

Without policy measures to offset the negative impact of the bonus culture, investment, productivity, and growth are likely to remain depressed. Given the slow growth of the working age population, the UK’s trend growth rate will thus be 1 per cent and that of the US 0.87 per cent, unless productivity improves. An alternative method of estimating US trend growth from the value data for tangible capital stock provides a slightly better rate of 1.1 per cent per annum. The prospects for the UK and US are so poor that policy measures to stimulate growth are vital. All growth is the result of changes in either TFP or NTV, so one or other must improve to avoid stagnation. There is no way to improve the former, but changes in NTV can be brought about through a lower hurdle rate, which requires the damage from the bonus culture to end.

Trend Output and the Output Gap in the UK

2011 ◽  
Vol 215 ◽  
pp. F63-F74 ◽  
Author(s):  
Ray Barrell ◽  
Simon Kirby
Keyword(s):  
Technical Progress ◽  
Labour Force ◽  
Significant Rise ◽  
Output Gap ◽  
User Cost ◽  
Average Growth ◽  
Factors Affecting ◽  
Full Capacity ◽  
The Uk ◽  
Trend Growth

This note looks at estimates of the current scale of the output gap in the UK and at the factors that affect estimates of the trend rate of growth. These issues are central to the debate on macroeconomic policy, both in the short and the long run. The speed at which the economy returns to full capacity, along with the scale of the output gap, will be important factors affecting average growth over the next five years. In the longer term, trend growth at full capacity is not immutable, but rather depends upon the rate of labour augmenting technical progress and the growth of the labour force. In the medium term these factors can be added to by temporary bursts of capital augmenting technical progress and by changes in the user cost of capital that may change the optimal capital-output ratio. Other factors, such as the cost of materials, also affect potential output. Over the past few months there has also been a significant rise in oil prices, and we judge this to have a strong permanent component which will reduce trend growth in the short term and trend output in the longer term. Its implications are more fully discussed in Barrell, Delannoy and Holland in this Review.

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 Do Military Expenditure and Conflict Affect Economic Growth in Sri Lanka? Evidence from the ARDL Bounds Test Approach

2016 ◽  
Vol 8 (3) ◽  
pp. 1
Author(s):  
Abdul Rasheed Sithy Jesmy ◽  
Mohd Zaini Abd Karim ◽  
Shri Dewi Applanaidu
Keyword(s):  
Growth Rate ◽  
Civil War ◽  
Sri Lanka ◽  
Military Expenditure ◽  
Gdp Growth ◽  
Per Capita Gdp ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Per Capita ◽  
Bounds Test

Conflicts in the form of civil war, ethnic tensions and political discord are of enduring concern and a major bottleneck to economic development in Sri Lanka. Three decades of civil war and unethical political culture have caused severe economic problems for the country, including slower rate of growth and a huge defence expenditure. The aim of this study is to examine the effect of military expenditure and conflict on per capita GDP growth rate in Sri Lanka from 1973 to 2014 using the Solow growth model and ARDL bounds test approach. The results of the bounds test are highly significant and lead to cointegration. The negative and significant coefficients of the error correction term illustrate the expected convergence process in the long-run dynamic of per capita GDP. The estimated empirical results show that, the coefficients of military expenditure and conflict are negative and statistically significant in the short-run as well as in the long-run in determining per capita GDP growth rate in Sri Lanka. Hence, it is critically important to take necessary action to decrease military expenditure and provide an efficient political solution to the problem of minorities, specifically in the post-war period.

scholarly journals Was the Gibson Paradox for real? A Wicksellian study of the relationship between interest rates and prices

2014 ◽  
Vol 21 (2) ◽  
pp. 139-163 ◽  
Author(s):  
Jagjit S. Chadha ◽  
Morris Perlman
Keyword(s):  
Interest Rates ◽  
Positive Relationship ◽  
Formal Model ◽  
Natural Rate ◽  
Market Rate ◽  
Long Run ◽  
Advanced Economies ◽  
The Uk ◽  
Gibson Paradox ◽  
The Relationship

We examine the relationship between prices and interest rates for seven advanced economies in the period up to 1913, emphasising the UK. There is a significant long-run positive relationship between prices and interest rates for the core commodity standard countries. Keynes ([1930] 1971) labelled this positive relationship the ‘Gibson Paradox’. A number of theories have been put forward as possible explanations of the paradox but they do not fit the long-run pattern of the relationship. We find that a formal model in the spirit of Wicksell (1907) and Keynes ([1930] 1971) offers an explanation for the paradox: where the need to stabilise the banking sector's reserve ratio, in the presence of an uncertain ‘natural’ rate, can lead to persistent deviations of the market rate of interest from its ‘natural’ level and consequently long-run swings in the price level.

The reflexive turn in key account management

2014 ◽  
Vol 48 (11/12) ◽  
pp. 2071-2104 ◽  
Author(s):  
Markus Vanharanta ◽  
Alan J.P. Gilchrist ◽  
Andrew D. Pressey ◽  
Peter Lenney
Keyword(s):  
Empirical Studies ◽  
Negative Relationship ◽  
Success Rates ◽  
Key Account Management ◽  
Content Type ◽  
Account Management ◽  
Long Run ◽  
Key Account ◽  
And Performance ◽  
The Uk

Purpose – This study aims to address how and why do formal key account management (KAM) programmes hinder effective KAM management, and how can the problems of formalization in KAM be overcome. Recent empirical studies have reported an unexpected negative relationship between KAM formalization and performance. Design/methodology/approach – An 18-month (340 days) ethnographic investigation was undertaken in the UK-based subsidiary of a major US sports goods manufacturer. This ethnographic evidence was triangulated with 113 in-depth interviews. Findings – This study identifies how and why managerial reflexivity allows a more effectively combining of formal and post-bureaucratic KAM practices. While formal KAM programmes provide a means to initiate, implement and control KAM, they have an unintended consequence of increasing organizational bureaucracy, which may in the long-run hinder the KAM effectiveness. Heightened reflexivity, including “wayfinding”, is identified as a means to overcome many of these challenges, allowing for reflexively combining formal with post-bureaucratic KAM practices. Research limitations/implications – The thesis of this paper starts a new line of reflexive KAM research, which draws theoretical influences from the post-bureaucratic turn in management studies. Practical implications – This study seeks to increase KAM implementation success rates and long-term effectiveness of KAM by conceptualizing the new possibilities offered by reflexive KAM. This study demonstrates how reflexive skills (conceptualized as “KAM wayfinding”) can be deployed during KAM implementation and for its continual improvement. Further, the study identifies how KAM programmes can be used to train organizational learning regarding KAM. Furthermore, this study identifies how and why post-bureaucratic KAM can offer additional benefits after an organization has learned key KAM capabilities. Originality/value – A new line of enquiry is identified: the reflexive-turn in KAM. This theoretical position allows us to identify existing weakness in the extant KAM literature, and to show a practical means to improve the effectiveness of KAM. This concerns, in particular, the importance of managerial reflexivity and KAM wayfinding as a means to balance the strengths and weaknesses of formal and post-bureaucratic KAM.

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