Macroeconomic performance in the United Kingdom has been disappointing in recent years: for most of the post-crisis period, GDP growth has been unexpectedly weak, and inflation unexpectedly strong. That unexpected weakness in GDP reflects a combination of weaker growth in the United Kingdom's...

The path of labour supply is a key consideration for the Monetary Policy Committee (MPC). It helps to determine the overall supply capacity of the economy and therefore the amount of output that can be produced without generating excess inflationary pressure. Labour supply appears to have grown...

Employment has fallen during this recession but by much less than the fall in output. This article examines how the behaviour of the labour market compares with previous recessions. A number of factors, including greater flexibility in real wages, may have helped to mitigate the fall in...

We estimate a New Keynesian model with matching frictions and nominal wage rigidities on UK data. We are able to identify important structural parameters, recover the unobservable shocks that have affected the UK economy since 1971 and study the transmission mechanism. With matching frictions,...

We estimate a New Keynesian model with matching frictions and nominal wage rigidities on UK data. We are able to identify important structural parameters, recover the unobservable shocks that have affected the UK economy since 1971 and study the transmission mechanism. With matching frictions,...