The behaviour of labour productivity in the United Kingdom since the onset of the recession in early 2008 constitutes a puzzle. Over four years after the recession began labour productivity is still below its previous peak level. This paper considers the hypothesis that economic capacity can be...

While GDP is the appropriate measure of output, I argue that Weitzman's NDP (WNDP)-nominal net domestic product deflated by the price of consumption-is the appropriate measure of welfare. Total factor productivity (TFP) growth measures the shift in the GDP frontier, and there is an analogous...

The author applies the method of R. J. Caballero and R. K. Lyons to industry-level data for U.K. manufacturing. He finds evidence for a positive external effect, arising from the expansion of manufacturing as a whole, but expansion at the sectoral level was found not to generate external...

Should we use ex post or ex ante measures of user costs to calculate the contribution of capital in a growth accounting exercise? The answer, based on a simple model of temporary equilibrium, is that ex post is better in theory. In practice researchers usually calculate ex post user costs by...

According to Baumol's model of unbalanced growth, if resources are shifting towards industries where productivity is growing relatively slowly, the aggregate productivity growth rate will slow down. This conclusion is often applied to the advanced industrial economies, where resources are indeed...

This paper uses a new industry-level dataset to quantify the roles of structural change and information and communication technology (ICT) in explaining productivity growth in the United Kingdom, 1970-2000. The dataset is for 34 industries covering the whole economy, of which 31 industries are...

Greenwood, Hercowitz and Krusell have claimed that the Jorgenson form of growth accounting is conceptually flawed and severely understates the role of technological progress embodied in new capital goods ('embodiment') in explaining US growth. To the contrary, in this paper it is shown that in...