Suchergebnisse

This note looks at estimates of the current scale of the output gap in the UK and at the factors that affect estimates of the trend rate of growth. These issues are central to the debate on macroeconomic policy, both in the short and the long run. The speed at which the economy returns to full capacity, along with the scale of the output gap, will be important factors affecting average growth over the next five years. In the longer term, trend growth at full capacity is not immutable, but rather depends upon the rate of labour augmenting technical progress and the growth of the labour force. In the medium term these factors can be added to by temporary bursts of capital augmenting technical progress and by changes in the user cost of capital that may change the optimal capital-output ratio. Other factors, such as the cost of materials, also affect potential output. Over the past few months there has also been a significant rise in oil prices, and we judge this to have a strong permanent component which will reduce trend growth in the short term and trend output in the longer term. Its implications are more fully discussed in Barrell, Delannoy and Holland in this Review.

Summary
We study the historical trends in the coverage of the related topics growth and stability in the field of macroeconomics. It is argued that over the past 25 years research on growth has quantitatively dominated research on output variability. The article seeks to make a contribution to an integrated study of output growth and output volatility. This integration builds on ideas proposed by Fischer Black. We clarify Black's contribution and show that the variability of output depends on the level of output as well as on the growth rate of output. The study then focuses on the experience of OECD countries since 1970. Based on statistical estimates we document the minimal (or efficient) level of output variability that a country could have achieved over the last four decades. This normative benchmark is similar to the notion of a tradeoff between portfolio return and portfolio variance known from the field of finance. A country's excessive level of output variability suggests necessary improvements in the design of stabilization and regulation policies. The international comparison of countries based on this approach indicates that many (although not all) of the high growth economies have experienced output variability significantly above the efficient level.

Are we at full employment? Here are some estimates: Figure 1: Output gap, from CBO (blue), from OECD (tan), from IMF (green), from Fleischman/Roberts-FRB (red), all in % of potential GDP. NBER defined recession dates shaded gray. Source: CBO February 2024, OECD November 2023, IMF October 2023, Atlanta Fed Taylor rule utility February 2024, NBER. […]

In September–October 2009, Russia made headlines when its oil exports in the second quarter of 2009 surpassed that of the world's largest oil supplier, Saudi Arabia. In April–June 2009, Russia exported 7.4 million barrels of oil per day compared to Saudi Arabia's oil exports of 7 million barrels. In addition, in the middle of 2009 Russian oil output reached a ten-year record of 9.91 million barrels per day. At first glance, it may appear that the global financial meltdown has not made a severe impact on the Russian oil industry. However, the Russian reality is rather different if not complex. First, it can be argued that the recent increase in Russian oil exports was primarily driven by external market conditions rather than domestic policies. In fact, Russian government policies of the past eight years promoted the stagnation rather than the development of the oil sector. Secondly, although according to official data for the second quarter of 2009 Russia surpassed the other top oil-producing nation, Saudi Arabia, in terms of oil exports, it actually was placed worst amongst all G20 countries in terms of economic performance during the crisis of 2009. Quite notably, in April–June 2009 in comparison to Saudi Arabia's GDP decline of 0.9 percent, Russia's GDP fell by as much as 10.9 percent. Poor economic performance in Russia is linked not only to the sudden fall of oil prices within the second half of 2008, but also to the manner in which the government's fiscal policies and taxation of the domestic oil sector were implemented from 2004 through 2008. However, before these issues are examined further in this brief study it is essential to establish the actual factors behind Russia's rise to its status as a leading oil exporter in the second quarter of 2009.