This paper constructs estimates of total factor productivity (TFP) growth for the United Kingdom for the period 1970-2000, using an industry data set that spans the whole economy. The estimates are obtained by controlling for variable utilisation of capital and labour, and costs of adjusting...

Over the past 20 years, the constant-price and current-price ratios of business investment to total output have behaved very differently. In this article we use a simple framework to examine how these two ratios should behave in long-run equilibrium. We investigate the conditions in which each...

This paper introduces the Bank of England's new forecasting platform and provides examples of how it can be applied to practical forecasting problems. The platform consists of four components: COMPASS, a structural central organising model; a suite of models, used to fill in the gaps in the...

In aggregate models, costs that penalise changes in investment - investment adjustment costs - have been introduced to help account for a variety of business cycle and asset market phenomena. In this paper, we evaluate empirical evidence for these types of costs using US and UK industry data. We...

This paper estimates UK capital adjustment costs, using a data set for 34 industries spanning the whole UK economy for the period 1970-2000. The results show that it is costly to install new capital, and that it has been more costly to adjust the level of non-ICT capital (plant, machinery,...

We construct a measure of the short-term world interest rate using principal component analysis. Drawing on real interest rate data for 18 OECD countries for the period 1985-2008, persistent deviations from the world interest rate that cannot be explained by movements in the real exchange rate...