Hostname: page-component-cd9895bd7-jkksz Total loading time: 0 Render date: 2024-12-22T18:54:20.586Z Has data issue: false hasContentIssue false
  • English
  • Français

The New British Economy

Published online by Cambridge University Press:  26 March 2020

Richard Kneller  and
Garry Young
Richard Kneller
Affiliation:
University of Nottingham
Garry Young
Affiliation:
Bank of England
Get access Rights & Permissions [Opens in a new window]

Abstract

The British economy has performed well since the recession of the early 1990s. How much of this is due to the revolution in information and communications technology (ICT)? We find that the stock of computing equipment has grown at a similar rate to that seen in the US, but there appears to have been no similar ICT-induced pick-up in productivity growth. We suggest that any underlying improvement in productivity growth has been obscured by a slowdown in manufacturing and by the need for the unemployed to be absorbed into employment. We find no evidence yet of any clear effect of ICT on pricing and suggest that any benefit of greater competition is likely to come about by encouraging productivity growth rather than by reducing margins. We argue that the main cause of Britain's improved performance lies in the labour market. Looking forward, we are optimistic that the benefits of ICT will become more apparent as the factors that have obscured it become less important.

Type
Articles
Information
National Institute Economic Review , Volume 177 , July 2001 , pp. 70 - 84
Copyright
Copyright © 2001 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

∗

This paper was completed while both authors were at the National Institute of Economic and Social Research. The views expressed do not necessarily reflect those of the Bank of England. We are grateful to participants at seminars hosted by NIESR, the University of Kent and the House of Commons Treasury Committee for comments and suggestions. We are responsible for any remaining errors.

References

Batini, N., Jackson, B. and Nickell, S. (2000), ‘Inflation dynamics and the labour share in the UK’, External MPC Unit, Discussion paper no. 2, Bank of England.Google Scholar
Bloom, N. and Bond, S. (2001), ‘UK investment: high, low, rising, falling?’ Institute for Fiscal Studies, Briefing Note no. 18.CrossRefGoogle Scholar
Broadbent, B. and Walton, D. (2000), ‘How “new” is the UK economy’, Goldman Sachs Global Economics Paper no. 43.Google Scholar
Brookes, M. and Wahhaj, Z. (2001), ‘The economic effects of business-to-business internet activity’, National Institute Economic Review, 175, January, pp. 95–108.CrossRefGoogle Scholar
Buiter, W. (2000), ‘The new economics and the old monetary economics’, Bank of England Quarterly Bulletin, May, 40(2).Google Scholar
Department of Trade and Industry (DTI) (2000), UK Competitiveness Indicators 1999.Google Scholar
Gordon, R.J. (1999), ‘Has the “New Economy” rendered the productivity slowdown obsolete?’, mimeo dated June 14, 1999.Google Scholar
Jorgenson, D.W. and Stiroh, K.J. (2000), ‘Raising the speed limit: US economic growth in the information age’, mimeo.CrossRefGoogle Scholar
Lansbury, M., Soteri, S. and Young, G. (1997), ‘Improving estimates of the UK capital stock’, report for the Office for National Statistics prepared at NIESR.Google Scholar
Nielson, A.L. (2000), ‘Nielsen//NetRatings Global Internet Trends’, Q2 2000. http://eratings.com.Google Scholar
Office for National Statistics (ONS) (2000), ‘Review of short term output indicators’, National Statistics Quarterly Review Series, 1.Google Scholar
Oliner, S.D. and Sichel, D.E. (2000), ‘The resurgence of growth in the late 1990s: is information technology the story?’ Federal Reserve Board mimeo.CrossRefGoogle Scholar
O'Mahony, M. (1999), Britain's Productivity Performance 1950-1996, An International Perspective, London, National Institute of Economic and Social Research.Google Scholar
Oulton, N. (2001), ‘ICT and productivity growth in the UK’, Bank of England Working Paper (forthcoming).CrossRefGoogle Scholar
Richardson, C. and Bowman, J. (2000) ‘[email protected]’, Economic Trends, April, pp. 89–99.Google Scholar
Tevlin, S. and Whelan, K. (2000), ‘Explaining the investment boom of the 1990s’, Federal Reserve Board mimeo.CrossRefGoogle Scholar
Wadhwani, S. (2000), ‘The impact of the internet on UK inflation’, Bank of England Quarterly Bulletin, May, 40(2), pp. 184–198.Google Scholar
Whelan, K. (2000), ‘Computers, obsolescence, and productivity’, Federal Reserve Board mimeo.CrossRefGoogle Scholar