Samples
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Publications
| 31.3.2006 | Prospects for UK consumption |
| The outlook for consumption is critical to both the MPC’s and the Treasury’s forecasts. Both are relying on a rebound in spending to underpin a return to above-trend GDP growth by the end of the year. In this article we set out the kind of assumptions we believe one has to make in order to generate such an outturn using a standard consumption model. For comparison purposes we have also shown two alternative paths for consumer spending, both of which lie to the downside of what we have called the MPC forecast. Both of these alternative scenarios suggest that further easing in monetary policy will eventually be needed. |
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Models
| Fathom's trend growth ready reckoner
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The model is generic, it can be used to consider the potential growth rate of any country. It has three elements: technological progress (which is assumed to be autonomously given); the contribution from labour, which includes an estimate of the NAIRU as well as of working age population growth; and a contribution from the capital stock. Use this model to see how changes in these variables can affect a country's trend rate of growth in transition. |
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