Working Paper No. 470
Long and short-term effects of the financial crisis on labour productivity, capital and output ()
Nicholas Oulton and María Sebastiá-Barriel
The behaviour of labour productivity in the United Kingdom since the onset of the recession in early 2008 constitutes a puzzle. Over four years after the recession began labour productivity is still below its previous peak level. This paper considers the hypothesis that economic capacity can be permanently damaged by financial crises. A model which allows a financial crisis to have both a short-run effect on the growth rate of labour productivity and a long-run effect on its level is estimated on a panel of 61 countries over 1955-2010. The main finding is that a banking crisis as defined by Reinhart and Rogoff on average reduces the short-run growth rate of labour productivity by between % and % per year and the long-run level by between % and % (depending on the method of estimation), for each year that the crisis lasts. A banking crisis also reduces the long-run level of capital per worker by an average of about 1%. The corresponding effect on GDP per capita is about double the effect on GDP per worker since there is a long-run, negative effect on the employment ratio.
Stata file containing data to accompany Working Paper No. 470 (149KB)
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Excel file containing data to accompany Working Paper No. 470 ()
• To sustain the current momentum, the EU should first commit to a limited number of key reforms, including more integrated accounting enforcement and supervision of audit firms. Second, it should set up autonomous taskforces to prepare proposals on the more complex issues: corporate credit information, financial infrastructure, insolvency, financial investment taxation and the retrospective review of recent capital markets regulation. The aim should be substantial legislative implementation by the end of the current EU parliamentary term.
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Auditing is one of the most important branches of accounting discipline. Auditing is the procedure in which an auditor examines the financial results that include balance sheet, cash flows, income/statement and other financial documents. The reason to do auditing is to ensure that the practices which a business can be followed are ethical. The responsibility of the auditors is to inspect business procedures and verify the financial accounts. Feel free to contact us us for A grade Accounting Assignment Help and Accounting Homework Help. It is also the duty of auditors to highlight the unlawful practices, penalize the businesses or companies and guide them about following the ethical practices. In the branch of auditing, there are two kinds of auditors such as internal auditor and external auditor. Internal auditors inspect the internal environment of the business; whereas the external auditors scrutinize the external environment of the business.
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Experts in private wealth firms and tax firms we spoke to said that the reduction of capital gains threshold could benefit investments made in AIF categories I and II that can be exited between two and three years. But since most of the investments made into, and also by AIFs are generally for more than three years, the budget proposal would have limited appeal.
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