Input Price Shocks and the Slowdown in Economic Growth: The Case of U.K.Manufacturing

60 Pages Posted: 10 Oct 2007 Last revised: 1 May 2022

See all articles by Michael Bruno

Michael Bruno

affiliation not provided to SSRN

Jeffrey D. Sachs

Columbia University - Columbia Earth Institute; National Bureau of Economic Research (NBER)

Date Written: February 1982

Abstract

This paper provides a theoretical and empirical analysis of the effects of input price shocks on economic growth, with a focus on United Kingdom manufacturing in the 1970s. The theoretical model predicts a discrete decline in out- put and productivity after an input price rise, and a longer-run slowdown in productivity growth, real wage growth, and capital accumulation. These features characterize the United Kingdom and most other OECD economies after 1973. The empirical results confirm the important role of input prices in recent U.K. adjustment, but also point to an important role for other supply and demand factors.

Suggested Citation

Bruno, Michael and Sachs, Jeffrey D., Input Price Shocks and the Slowdown in Economic Growth: The Case of U.K.Manufacturing (February 1982). NBER Working Paper No. w0851, Available at SSRN: https://ssrn.com/abstract=351386

Michael Bruno

affiliation not provided to SSRN

No Address Available

Jeffrey D. Sachs (Contact Author)

Columbia University - Columbia Earth Institute ( email )

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National Bureau of Economic Research (NBER)

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