A Long View of the UK Business Cycle
We outline a number of ‘stylised’ facts on the UK business cycle obtained from analysis of the long-run UK annual dataset. The findings are to some extent standard. Consumption and investment are pro-cyclical, with productivity playing a dominant role in explaining business cycle fluctuations at all horizons. Money neutrality obtains over the long run but there is clear evidence of non-neutrality over the short run, particularly at the business cycle frequencies. Business cycle relationships with the external sector via the real exchange rate and current account are notable. Postwar, the price level is counter-cyclical and real wages are pro-cyclical, as are nominal interest rates. Modern general equilibrium macroeconomic models capture many of these patterns.
Year of publication: |
2002
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Authors: | Chadha, Jagjit S. ; Nolan, Charles |
Published in: |
National Institute Economic Review. - National Institute of Economic and Social Research (NIESR). - Vol. 182.2002, 1, p. 72-89
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Publisher: |
National Institute of Economic and Social Research (NIESR) |
Saved in:
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