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Deconstructing Growth in UK Manufacturing

Listed author(s):
  • Gavin Cameron
  • James Proudman
  • Stephen Redding

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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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
Handle: RePEc:boe:boeewp:73
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