Deconstructing Growth in U.K. Manufacturing

Bank of England Working Paper No. 73

58 Pages Posted: 9 Mar 1998

See all articles by Gavin Cameron

Gavin Cameron

University of Oxford - Department of Economics (Deceased)

James Proudman

Bank of England, Monetary Instruments and Markets Division

Stephen J. Redding

Princeton University

Date Written: December 1997

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, labor 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.

JEL Classification: E23

Suggested Citation

Cameron, Gavin and Proudman, James and Redding, Stephen J., Deconstructing Growth in U.K. Manufacturing (December 1997). Bank of England Working Paper No. 73, Available at SSRN: https://ssrn.com/abstract=64419 or http://dx.doi.org/10.2139/ssrn.64419

Gavin Cameron

University of Oxford - Department of Economics (Deceased)

James Proudman (Contact Author)

Bank of England, Monetary Instruments and Markets Division ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Stephen J. Redding

Princeton University ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://www.princeton.edu/~reddings/

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