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

Nicholas Oulton

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 H62 J24 O41 (search for similar items in EconPapers)
Pages: 107 pages
Date: 2013-10
New Economics Papers: this item is included in nep-fdg and nep-mac
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://eprints.lse.ac.uk/58239/ Open access version. (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 aftermath of the financial crisis (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:58239

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().