Various teaching links

We discussed the role of the state in the last section of class on Wednesday. Here is a typically insightful essay by Tim Taylor on what the state can and cannot do.

Today's productivity release

The ONS productivity release is out.

Performance is still horrible.  Pre recession grwoth in GDP per hour was 2%, now it's been 1% for a decade.  There is a very slight pick up in the quarterly rate, but nothing very strong.



This means we still have a 20% gap with the competition



What is going on? It seems to be a combination of many things.  One very helpful release are the MFP numbers, now quarterly.  So part of the slowdown is capital, but most is TFP.


 One thing that is a big change is the contribution of labour allocation.  In the previous release this was very large, accounting for 60% of the slowdown in output per hour. This release excludes sector L and finds that it now accounts for very little of the slowdown, in that it was negative before the recession and is still negative.



 There is also a large contribution of financial services in London to the slowdown. Perhaps it's a combination of lots of these small things.