Garcia-Macia, D;
Korosteleva, J;
(2021)
Tracing Productivity Growth Channels in the UK.
(IMF Working Papers
2021(273).
IMF Working Papers
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Abstract
What drove the UK productivity slowdown post-GFC, and how is the post-Covid recovery expected to differ? This paper traces the sources of TFP growth in the UK over the last two decades through the lens of a structural model of innovation, using registry data on the universe of firms. The dominant innovation source in the pre-GFC decade were improvements by incumbent firms on their own products, whereas creation of new varieties by entrants took a leading role post-GFC. In the Covid recovery, survey data suggests that creative destruction (i.e., innovation replacing other firms’ products) is expected to gain importance. This emphasizes the need for growth policies that facilitate labor and capital reallocation across firms, in addition to R&D support.
| Type: | Working / discussion paper |
|---|---|
| Title: | Tracing Productivity Growth Channels in the UK |
| ISBN-13: | 9781616356248 |
| DOI: | 10.5089/9781616356248.001 |
| Publisher version: | https://doi.org/10.5089/9781616356248.001 |
| Language: | English |
| Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | economic growth, innovation, creative destruction; UK productivity slowdown post-GFC; UK market economy; GFC decade; innovation source; leading role; sources of TFP growth; exit rate; Employment; Total factor productivity; Job creation; Productivity; Job destruction; Global |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > SSEES |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10140891 |
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