We provide evidence that positive industry-level productivity shocks cause employment to fall in the short run in the UK economy. We use a new UK industry data(over the period 1970-2000), which covers both manufacturing and non-manufacturing industries, and identify productivity shocks using...

In aggregate models, costs that penalise changes in investment - investment adjustment costs - have been introduced to help account for a variety of business cycle and asset market phenomena. In this paper, we evaluate empirical evidence for these types of costs using US and UK industry data. We...