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Is the UK Productivity Slowdown Unprecedented?

Nicholas Crafts () and Terence C. Mills
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Terence C. Mills: Loughborough University

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: We estimate trend UK labour productivity growth using a Hodrick-Prescott filter method. We use the results to compare downturns where the economy fell below its pre-existing trend. We find that the current productivity slowdown has resulted in productivity being 19.7% below the pre-2008 trend path in 2018. This is nearly double the previous worst productivity shortfall ten years after the start of a downturn. On this criterion the slowdown is unprecedented in the last 250 years. We conjecture that this reflects a combination of adverse circumstances, namely, a financial crisis, a weakening impact of ICT and impending Brexit.

Keywords: Brexit; financial crisis; Hodrick-Prescott filter; ICT; productivity slowdown JEL Classification: C22; N13; N14; O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-eff and nep-his
Date: 2019
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