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Chapter I. The Home Economy
Published online by Cambridge University Press: 26 March 2020
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After a check due to the miners' strike, total output has been rising since last summer. It was probably about 1 3/4–2 per cent higher in the first quarter of 1935 than in the third quarter of 1984. Allowing for the fact that perhaps 1/2 per cent of this rise was due to a recovery in coal production, as the strike became less effective and finally ended in March, the ‘underlying’ rate of growth may have been of the order of 2 1/2–3 per cent a year.
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- Copyright © 1985 National Institute of Economic and Social Research
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(1) Although the dispute reduced the level of GDP throughout 1984, it was only during the first half that growth was significantly affected. The CSO estimates that GDP was reduced by ½ per cent in the first quarter and by 1 ¼-1½ per cent in each of the other three.
(2) This is according to current estimates on the output basis. For several years there has been a tendency for initial estimates on this basis to be revised up. It is possible that this will also happen to the latest figures, though the CSO now makes a mechanical allowance for under-recording in compiling its current estimates for manufacturing.
Expenditure GDP shows a very sharp rise in the fourth quarter of last year (over 3 per cent), after falls in the second and third; however estimates on this basis are liable to move irregularly from quarter to quarter, and are considered to be less reliable than the output figures as a measure of short-term movements.
(3) For three years running now the figures show a sharp rise in the fourth quarter, after a decline between the first and third.
(1) In a situation of pure excess surplus, only demand elasticities would count.
(2) It would be quite inappropriate to use elasticities derived from the effect of average wages on total employment in this context.
(1) Financial Statement and Budget Report 1985-86.
(1) The Government's Expenditure Plans 1985-86 to 1987-88, Cmnd 9428-II, p.112, para. 22.
(2) The increase in leasing to non-manufacturing is even more marked.
(3) See National Institute Economic Review, no. 111, February 1985, pp.21-2.
(1) The estimates of volume are only rough; they are obtained by deflating value figures by the unit value index for exports to all destinations.
(1) The present position of the half-dozen or so major outstanding wage claims in general government is as follows. The civil service unions have rejected an offer of 4.4 per cent. The teaching unions have rejected 4 per cent and are taking industrial action. Rises for nurses, doctors and the armed forces will be recommended by review bodies, which have yet to report. All these groups were due to settle on 1 April. Town hall staff and central government manual workers do not settle until July.
(2) See the note on pp. 31-4 of this Review.
(3) This is the effect compared with no tax changes whatsoever. The effect compared with indexation (an estimate of which is given above) is much smaller.
(1) This is because, although all the estimates of the employed labour force for the past three years have been revised down absolutely, the estimate for 1984 has been raised up relatively. The revisions are described in the Employment Gazette for March.
(2) In the light of movements since 1979 we have assumed about 70 per cent of changes in manufacturing employment will be reflected in changes in registered unemployment, but only about one half of changes in non-manufacturing employment and one third of changes in self-employment.
(3) National Institute Economic Review, no. 111, February 1985, pp. 17-18.