The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?

The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?

A new explanation for the UK and developed world productivity puzzle is proposed which grafts the Lewis (1954) model onto a standard Solow growth model. What is called here the neo-Lewis model is identical to the Solow model in good times. But in bad times foreign demand for a country’s exports is c...

Full description

Bibliographic Details
Main Author: Nicholas Oulton
Format: Article
Language:English
Published: Centre for the Study of Living Standards 2019-04-01
Series:International Productivity Monitor
Subjects:
total factor productivity
labour productivity
uk
arthur lewis
Online Access:http://www.csls.ca/ipm/36/Oulton.pdf
id doaj-a8e13af119cc4c7a9d07d9da4d20bf6d
record_format Article
spelling doaj-a8e13af119cc4c7a9d07d9da4d20bf6d2020-11-25T03:56:14ZengCentre for the Study of Living StandardsInternational Productivity Monitor1492-97591492-97672019-04-0136110141The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?Nicholas Oulton0Centre for Macroeconomics, London School of Economics, National Institute of Economic and Social Research, and Economic Statistics Centre of ExcellenceA new explanation for the UK and developed world productivity puzzle is proposed which grafts the Lewis (1954) model onto a standard Solow growth model. What is called here the neo-Lewis model is identical to the Solow model in good times. But in bad times foreign demand for a country’s exports is constrained below potential supply. This makes labour productivity growth depend negatively on the growth of labour input and positively on the growth of export demand.The predictions of the neo-Lewis model are tested on data for 23 countries (20 EU and 3 non-EU) and find support. It is also argued that the neo-Lewis model can explain the fall in TFP growth, in the UK and elsewhere, after 2007. This proposition also finds support when tested on a larger sample of 52 countries.http://www.csls.ca/ipm/36/Oulton.pdftotal factor productivitylabour productivityukarthur lewis
collection DOAJ
language English
format Article
sources DOAJ
author Nicholas Oulton
spellingShingle Nicholas Oulton
The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?
International Productivity Monitor
total factor productivity
labour productivity
uk
arthur lewis
author_facet Nicholas Oulton
author_sort Nicholas Oulton
title The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?
title_short The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?
title_full The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?
title_fullStr The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?
title_full_unstemmed The UK and Western Productivity Puzzle: Does Arthur Lewis Hold the Key?
title_sort uk and western productivity puzzle: does arthur lewis hold the key?
publisher Centre for the Study of Living Standards
series International Productivity Monitor
issn 1492-9759
1492-9767
publishDate 2019-04-01
description A new explanation for the UK and developed world productivity puzzle is proposed which grafts the Lewis (1954) model onto a standard Solow growth model. What is called here the neo-Lewis model is identical to the Solow model in good times. But in bad times foreign demand for a country’s exports is constrained below potential supply. This makes labour productivity growth depend negatively on the growth of labour input and positively on the growth of export demand.The predictions of the neo-Lewis model are tested on data for 23 countries (20 EU and 3 non-EU) and find support. It is also argued that the neo-Lewis model can explain the fall in TFP growth, in the UK and elsewhere, after 2007. This proposition also finds support when tested on a larger sample of 52 countries.
topic total factor productivity
labour productivity
uk
arthur lewis
url http://www.csls.ca/ipm/36/Oulton.pdf
work_keys_str_mv AT nicholasoulton theukandwesternproductivitypuzzledoesarthurlewisholdthekey
AT nicholasoulton ukandwesternproductivitypuzzledoesarthurlewisholdthekey
_version_ 1724466161400152064

Similar Items