Hostname: page-component-7bb8b95d7b-qxsvm Total loading time: 0 Render date: 2024-09-18T05:14:50.337Z Has data issue: false hasContentIssue false
  • English
  • Français

Productivity Growth in Manufacturing, 1963-85: The Roles of New Investment and Scrapping

Published online by Cambridge University Press:  26 March 2020

Nicholas Oulton
Get access Rights & Permissions [Opens in a new window]

Abstract

The twin forces of investment in new and scrapping of old equipment are traditionally supposed to play a large part in explaining productivity growth. Scrapping cannot in practice be observed directly but can be inferred by estimating a vintage capital model. When this is done it is found that these forces do indeed have a substantial role to play in explaining differences between industries in productivity growth rates in the 1960s and 1970s, but not in the 1980s. The productivity improvement observed in most industries in the 1980s must therefore be ascribed largely to forces other than new investment and scrapping.

Type
Articles
Information
National Institute Economic Review , Volume 127 , February 1989 , pp. 64 - 75
Copyright
Copyright © 1989 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.)

References

Central Statistical Office (1980), Standard Industrial Classification Revised 1980: reconciliation with Standard Industrial Classification 1968, London, HMSO.Google Scholar
Central Statistical Office (1965), United Kingdom national account., sources and methods, 3rd edition, London, HMSO.Google Scholar
Griffin, T. (1979), ‘The stock of fixed assets in the United Kingdom: how to make best use of the statistics’, in Patterson, K.D. and Schott, K. (eds.) The measurement of capital: theory and practice, Macmillan, London.Google Scholar
Hulten, C.R., Robertson, J.W. and Wykoff, F.C. (1987), ‘Energy, obsolescence and the productivity slowdown’, NBER Working Paper No. 2404.CrossRefGoogle Scholar
Ingham, A., Ulph, A., and Toker, M. (1987), ‘A vintage model of scrapping and investment’, University of Southampton, mimeo.Google Scholar
Johansen, L. (1972), Production functions: an integration of micro and macro, short- and long-run aspects, North-Holland, Amsterdam.Google Scholar
Layard, R. and Nickell, S. (1988), ‘The Thatcher miracle?’, Centre for Labour Economics, mimeo.Google Scholar
Metcalf, D. (1988), ‘Water notes dry up’, London School of Economics, Centre for Labour Economics, Discussion Paper No. 320.Google Scholar
Mizon, G. and Nickell, S.J. (1963), ‘Vintage production models of UK manufacturing industry’, Scandinavian Journal of Economics, vol. 85, no.2,pp.295–310.CrossRefGoogle Scholar
Muettbauer, J. (1966), ‘Productivity and competitiveness in British manufacturing’, Oxford Review of Economic Policy, vol. 2, no. 3, Autumn, pp. i-xxv.Google Scholar
O'Mahony, M. and Oulton, N. (1969), ‘Industry-level estimates of the capital stock in UK manufacturing, 1948-85’, mimeo.Google Scholar
Oulton, N. (1987), ‘Plant closures and the productivity ‘mirade’ in manufacturing’, National Institute Economic Review, no. 121, August, pp. 53–9.CrossRefGoogle Scholar
Oulton, N. (1988), ‘Productivity, investment and scrapping in UK manufacturing: a vintage capital approach’, National Institute of Economic and Social Research Discussion Paper 148, November, London.Google Scholar
Oulton, N. (1989), ‘The productivity improvement of the 1980s: tests of some alternative hypotheses’, National Institute of Economic and Social Research, mimeo.Google Scholar
Penneck, S. and Woods, R. (1982), ‘Effects of leasing on statistics of manufacturing capital expenditure’, Economic Trends, February, pp.97–104.Google Scholar
Prais, S.J. (1986), ‘Some international comparisons of the age of the machine stock’, Journal of Industrial Economics, vol. 34, no. 3, pp. 261–77.CrossRefGoogle Scholar
Salter, W.E.G. (1960), ‘Productivity and technical change’, Cambridge University Press, Cambridge.Google Scholar
Solow, R.M. (1969), Growth theory: an exposition, Clarendon Press, Oxford.Google Scholar
Solow, R.M., Tobin, J., von Weizsäcker, C.C. and Yaari, M. (1966), Neoclassical growth with fixed factor proportions’, Review of Economic Studies’, vol. 33, pp. 79–115.CrossRefGoogle Scholar
Steedman, H. and Wagner, K. (1987), ‘A second look at productivity, machinery and skills in Britain and Germany’, National Institute Economic Review, no. 122, November, pp. 84–95.CrossRefGoogle Scholar
Wadhwani, S. and Wall, M. (1986), ‘The UK capital stock—new estimates of premature scrapping’, Oxford Review of Economic Policy, vol. 2, no. 3, pp. 44–55.CrossRefGoogle Scholar
Wren-Lewis, S. (1986), ‘An econometric model of UK manufacturing employment using survey data on expected output’, Journal of Applied Econometrics, vol. 1, pp. 297–316.CrossRefGoogle Scholar
Wren-Lewis, S. (1988), ‘Supply, liquidity and credit: a new version of the institute's domestic econometric macromodel’, National Institute Economic Review, no. 126, November, pp. 32–43.Google Scholar