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UK economy
Estimation of the economy’s trend growth and cyclical position are central to the Treasury’s assessment of economic prospects and the setting of fiscal policy. ‘Evidence on the UK Economic Cycle’ presents analysis relevant to the dating of the economic cycle, informing public scrutiny and debate on the issue.
Public finances and the cycle: Treasury Economic Working Paper No. 5 (November 2008): Under the Code for Fiscal Stability, the Government is required to publish estimates of fiscal aggregates adjusted for the effects of the economic cycle. This working paper updates previous HM Treasury estimates of the effects of the economic cycle on the public finances. The remainder of the paper explores other methodological issues related to cyclical-adjustment. Alternative approaches to cyclical-adjustment used by institutions such as the OECD, IMF and ECB are found to produce similar results to HM Treasury’s estimates. The paper also examines the effect of asset prices on measures of the structural fiscal balance.
Evidence on the economic cycle (November 2008): explains the Treasury's approach to measuring the economic cycle and draws on evidence from the economic indicators monitored by the Treasury to inform the latest assessment of the cyclical position of the economy. This paper builds on previous analysis of the economic cycle published by the Treasury, in particular the 2005 publications 'Evidence on the UK economic cycle' (July 2005) and the 'Technical note on cyclical indicators' (December 2005).
Trend growth: new evidence and prospects (December 2006) This paper sets out the Treasury's revised view on the neutral rate of trend output growth for the post-2006 period.
End of year fiscal report (December 2003) (PDF 350KB): Annex A of this report provides comprehensive analysis of the relationship between economic cycles and the public finances and supports the current coefficients used to calculate cyclically-adjusted fiscal aggregates.
Fiscal Policy: Public Finances and the Cycle (March 1999) (PDF 166KB): this paper forms part of an ongoing assessment of the effects of the economic cycle on the public finances. It updates earlier Treasury analysis and takes a more detailed look at Treasury estimates of potential output and the output gap.
Trend Growth: Recent Developments and Prospects (April 2002)
Trend Growth: Prospects and Implications for Policy (November 1999)
