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UK labour productivity since the onset of the crisis — an international and historical perspective

Author

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  • Abigail Hughes

    (Bank of England)

  • Jumana Saleheen

    (Bank of England)

Abstract

UK labour productivity has been persistently weak since the onset of the recent financial crisis. This suggests that there is significant spare capacity within UK companies, but business surveys instead point to little spare capacity. This article aims to shed light on this puzzle by looking at cross-country and historical evidence. It finds that it has been unusual to see persistently weak labour productivity after previous financial crises in advanced economies. UK labour productivity stands out as being weak relative to historic episodes; it is also weak compared to other countries in the recent crisis. This weakness is concentrated in the energy and service sectors, suggesting the supply potential of the economy has grown more slowly than usual since the start of the crisis.

Suggested Citation

  • Abigail Hughes & Jumana Saleheen, 2012. "UK labour productivity since the onset of the crisis — an international and historical perspective," Bank of England Quarterly Bulletin, Bank of England, vol. 52(2), pages 138-146.
  • Handle: RePEc:boe:qbullt:0077
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    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    2. Renato Faccini & Christopher Hackworth, 2010. "Changes in output, employment and wages during recessions in the United Kingdom," Bank of England Quarterly Bulletin, Bank of England, vol. 50(1), pages 43-50.
    3. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Restructuring and productivity growth in uk manufacturing," Economic Journal, Royal Economic Society, vol. 113(489), pages 666-694, July.
    4. repec:rnp:ecopol:09111 is not listed on IDEAS
    5. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Is the 2007 US Sub-Prime Financial Crisis So Different?: An International Historical Comparison," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(3), pages 291-299.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Blogs review: the UK’s output, employment and productivity puzzle
      by ? in Bruegel blog on 2012-10-01 18:16:14

    Citations

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    Cited by:

    1. Isoré, Marlène & Szczerbowicz, Urszula, 2017. "Disaster risk and preference shifts in a New Keynesian model," Journal of Economic Dynamics and Control, Elsevier, vol. 79(C), pages 97-125.
    2. Jumana Saleheen & Iren Levina & Marko Melolinna & Srdan Tatomir, 2017. "The financial system and productive investment: new survey evidence," Bank of England Quarterly Bulletin, Bank of England, vol. 57(1), pages 4-17.
    3. Kapelko, Magdalena & Oude Lansink, Alfons & Stefanou, Spiro, 2014. "The Impact of the 2008 Economic Crisis on Dynamic Productivity Growth of the Spanish Food Manufacturing Industry. An Impulse Response Analysis," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182769, European Association of Agricultural Economists.
    4. Stephen Burgess & Emilio Fernandez-Corugedo & Charlotta Groth & Richard Harrison & Francesca Monti & Konstantinos Theodoridis & Matt Waldron, 2013. "The Bank of England's forecasting platform: COMPASS, MAPS, EASE and the suite of models," Bank of England working papers 471, Bank of England.
    5. Alina Barnett & Sandra Batten & Adrian Chiu & Jeremy Franklin & Maria Sebastia-Barriel, 2014. "The UK productivity puzzle," Bank of England Quarterly Bulletin, Bank of England, vol. 54(2), pages 114-128.
    6. Nicholas Oulton & María Sebastiá-Barriel, 2013. "Long and Short-Term Effects of the Financial Crisis on Labour Productivity, Capital and Output," CEP Discussion Papers dp1185, Centre for Economic Performance, LSE.
    7. Nicholas Oulton, 2013. "Medium and long run prospects for UK growth in the aftermath of the financial crisis," Discussion Papers 1307, Centre for Macroeconomics (CFM).
    8. Alex Haberis & Richard Harrison & Matt Waldron, 2014. "Transitory interest-rate pegs under imperfect credibility," Discussion Papers 1422, Centre for Macroeconomics (CFM).
    9. Alina Barnett & Adrian Chiu & Jeremy Franklin & Maria Sebastia-Barriel, 2014. "The productivity puzzle: a firm-level investigation into employment behaviour and resource allocation over the crisis," Bank of England working papers 495, Bank of England.
    10. Robert Gilhooly & Martin Weale & Tomasz Wieladek, 2012. "Disaggregating the international business cycle," Discussion Papers 37, Monetary Policy Committee Unit, Bank of England.
    11. Rashmi Harimohan, 2012. "How has the risk to inflation from inflation expectations evolved?," Bank of England Quarterly Bulletin, Bank of England, vol. 52(2), pages 114-123.
    12. Richard Blundell & Claire Crawford & Wenchao Jin, 2014. "What Can Wages and Employment Tell Us about the UK's Productivity Puzzle?," Economic Journal, Royal Economic Society, vol. 0(576), pages 377-407, May.
    13. Shiv Chowla & Lucia Quaglietti & Lukasz Rachel, 2014. "How have world shocks affected the UK economy?," Bank of England Quarterly Bulletin, Bank of England, vol. 54(2), pages 167-179.

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