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Deconstructing Growth in UK Manufacturing

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  • Gavin Cameron
  • James Proudman
  • Stephen Redding

Abstract

This paper is concerned with the nature of economic growth in 19 manufacturing industries between 1970-92. There is substantial heterogeneity (both across sectors and time) in rates of growth of value-added, hours worked, labour productivity and Total Factor Productivity during the sample period. The decline in constant price value-added in aggregate manufacturing during the sample period is associated with significant changes in the relative size of individual sectors, and with noticeable changes in performance between the two peak-to-peak business cycles 1973-79 and 1979-89. Despite changes in the relative size of sectors, the vast majority of aggregate productivity growth is explained by within-sector productivity growth. An analysis of productivity levels also reveals considerable heterogeneity. The distribution of productivity levels across sectors exhibits an increase in dispersion and becomes increasingly positively skewed during the sample period. There is evidence of productivity levels in a number of industries converging at values just below the mean; productivity levels in a few sectors persistently remain above and rise away from mean values.

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File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1998/wp73.pdf
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Bibliographic Info

Paper provided by Bank of England in its series Bank of England working papers with number 73.

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Date of creation: Dec 1997
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Handle: RePEc:boe:boeewp:73

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  1. Zvi Griliches & Frank R. Lichtenberg, 1984. "R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?," NBER Chapters, in: R & D, Patents, and Productivity, pages 465-502 National Bureau of Economic Research, Inc.
  2. Friedman, Milton, 1992. "Do Old Fallacies Ever Die?," Journal of Economic Literature, American Economic Association, vol. 30(4), pages 2129-32, December.
  3. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
  4. Danny Quah, 1992. "Empirical Cross-Section Dynamics in Economic Growth," FMG Discussion Papers dp154, Financial Markets Group.
  5. Bernard, Andrew B & Jones, Charles I, 1996. "Productivity across Industries and Countries: Time Series Theory and Evidence," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 135-46, February.
  6. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
  7. Proudman, James & Redding, Stephen J, 1998. "Persistence and Mobility in International Trade," CEPR Discussion Papers 1802, C.E.P.R. Discussion Papers.
  8. G. Cameron, 1996. "Innovation and economic growth," LSE Research Online Documents on Economics 20685, London School of Economics and Political Science, LSE Library.
  9. Muellbauer, John, 1991. "Productivity and Competitiveness," Oxford Review of Economic Policy, Oxford University Press, vol. 7(3), pages 99-117, Autumn.
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  11. Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-47, October.
  12. Quah, Danny T, 1996. " Convergence Empirics across Economies with (Some) Capital Mobility," Journal of Economic Growth, Springer, vol. 1(1), pages 95-124, March.
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  15. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-80, December.
  16. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
  17. Quah, Danny, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEPR Discussion Papers 1355, C.E.P.R. Discussion Papers.
  18. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April.
  19. Stephen Redding & James Proudman, 1998. "Productivity convergence and international openness," Bank of England working papers 77, Bank of England.
  20. Philippe Aghion & Peter Howitt, 1997. "Endogenous Growth Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011662, December.
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Citations

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Cited by:
  1. Gavin Cameron, 1999. "Why did UK manufacturing productivity growth slow down in the 1970s and speed up in the 1980s," Economics Series Working Papers 1999-W24, University of Oxford, Department of Economics.
  2. Stephen Redding & James Proudman, 1998. "Productivity convergence and international openness," Bank of England working papers 77, Bank of England.
  3. Gavin Cameron & James Proudman & Stephen Redding, 1999. "Openness and its association with productivity growth in UK manufacturing industry," Bank of England working papers 104, Bank of England.
  4. Héctor Salgado Banda & Lorenzo E. Bernal Verdugo, 2007. "Multifactor Productivity and its Determinants: Al Empirical Analysis for Mexican Manufacturing," Working Papers 2007-09, Banco de México.
  5. James Proudman & Stephen Redding & Marco Bianchi, 1997. "Is International Openness associated with faster economic growth?," Bank of England working papers 63, Bank of England.

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