Medium and long run prospects for UK growth in the aftermath of the financial crisis

Nicholas Oulton

No 1307, Discussion Papers from Centre for Macroeconomics (CFM)

Abstract: In this paper I argue that the financial crisis is likely to have a long term impact on the level of labour productivity in the UK while leaving the long run growth rate unaffected. Based entirely on pre-crisis data, and using a two-sector growth model, I project the future growth rate of GDP per hour in the market sector to be 2.61% p.a. Based on a cross-country panel analysis of 61 countries over 1950-2010, the permanent reduction in the level of GDP per worker resulting from the crisis could be substantial, about 5½%. The cross-country evidence also suggests that there are permanent effects on employment, implying a possibly even larger hit to the level of GDP per capita of about 9%.

Keywords: Productivity; Potential Output; Growth; Financial; Banking Crisis; Recession (search for similar items in EconPapers)
JEL-codes: E32 G01 H63 J24 O41 (search for similar items in EconPapers)
Pages: 107 pages
Date: 2013-12
New Economics Papers: this item is included in nep-eec, nep-fdg, nep-gro and nep-mac
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Citations: View citations in EconPapers (7)

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http://www.centreformacroeconomics.ac.uk/Discussio ... MDP2013-07-Paper.pdf (application/pdf)

Related works:
Working Paper: Medium and Long Run Prospects for UK Growth in the Aftermath of the Financial Crisis (2013)
Working Paper: Medium and long run prospects for UK growth in the aftermath of the financial crisis (2013)
Working Paper: Medium and long run prospects for UK growth in the aftermathof the financial crisis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cfm:wpaper:1307

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