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Chapter I. The Home Economy

Published online by Cambridge University Press:  26 March 2020

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Extract

This time last year the general expectation was that the growth rate would slow down markedly, particularly as the stock market had just collapsed. In the event demand and output have both continued to rise very fast. Now the general expectation is, again, that the growth rate is about to fall sharply, this time because of the rise in interest rates during the summer. Clearly this view needs to be examined critically.

Type
Articles
Information
National Institute Economic Review , Volume 126 , November 1988 , pp. 6 - 17
Copyright
Copyright © 1988 National Institute of Economic and Social Research

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Footnotes

The forecasts were prepared by Andrew Britton, Michael Joyce and Paul Gregg, but they draw on the work of the whole team engaged in macroeconomic analysis and modelbuilding at the Institute.

References

(1) The national accounts data at 1985 prices were not available in time for the model equations to be re-estimated. In preparing this forecast we have therefore used the new data scaled to the levels of the old 1980 price data for the year 1985, so as to make them compatible with the model. The forecast output has been rescaled to the correct level for each series for presentation in the tables.

(2) For a report on this research see the forthcoming National institute Discussion Paper by R. Anderton, ‘UK exports of manufactures’, testing for the effects of non-price competitiveness, using stochastic trends and profitability measures.

(3) The effect of investment on capacity, and hence on imports, is quantified in the note by Simon Wren-Lewis on page 32 of this issue.

(4) The model was in fact run for ten years in all so as to provide a base for consistent expectations simulations like those reported in the note on page 32.