Factor Utilization and Adjusted Productivity Estimates for the UK

25 Pages Posted: 11 Apr 2007

See all articles by Jens D.J. Larsen

Jens D.J. Larsen

Wellington Management

Katharine S. Neiss

Bank of England - Monetary Analysis

Fergal Shortall

Bank of England

Abstract

This paper derives series for capital utilization, labour effort and total factor productivity (TFP) for the UK from a general equilibrium model with variable utilization and labour adjustment costs. Capital utilization tracks survey-based measures closely, but persistent movements in total hours worked mean our labour effort series is not as highly correlated with its comparators. Our estimated TFP series is less cyclical than the traditional Solow residual, although a weighted average of capital utilization and labour effort - aggregate factor utilization - and the Solow residual are not closely related.

Suggested Citation

Larsen, Jens D.J. and Neiss, Katharine S. and Shortall, Fergal, Factor Utilization and Adjusted Productivity Estimates for the UK. Oxford Bulletin of Economics and Statistics, Vol. 69, No. 2, pp. 245-269, April 2007, Available at SSRN: https://ssrn.com/abstract=978650 or http://dx.doi.org/10.1111/j.1468-0084.2006.00442.x

Jens D.J. Larsen (Contact Author)

Wellington Management ( email )

United States

Katharine S. Neiss

Bank of England - Monetary Analysis ( email )

Threadneedle Street
London EC2R 8AH
United Kingdom
+44 20 7601 4588 (Phone)
+44 20 7601 5018 (Fax)

Fergal Shortall

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

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