Andrew Henley

Time-of-use electricity pricing: Evidence from a British experiment

Seemingly unrelated regression (SURE) analysis is applied to data from a British time-of-use (TOU) pricing experiment. It is shown that consumption changes are statistically significant and important but vary by consumption strata. The results have implications for demand system analysis of TOU data.

Income inequality in corporatist and liberal economies: a comparison of trends within OECD countries

This paper examines trends in income distribution since the war in a number of OECD economies. It is shown that while most economies during the first two decades experienced decreasing income inequality, associated with the post-war boom, there has been considerable divergence thereafter. In this process the institutions of each country have mattered a great deal. By examining both liberal and corporatist economies we seek to delineate the links between economic performance and restructuring, and income inequality. The evidence is that, in contrast to the experience of liberal economies, the more corporatist economies have been able to adjust to the worsening economic climate without an increase in income inequality.

Housing assets and consumer spending - a regional-analysis

CARRUTH A. And HENLEY A. (1993) Housing assets and consumer spending: a regional analysis, Reg. Studies 27, 611–621. This paper is concerned with the relationship between the housing market and consumer spending for the eleven standard regions of the UK. Pooled regional cross-sectional and annual time-series data are used to appraise the effect of housing assets on regional consumer spending in the 1980s. A fixed effects estimator imposing common slope coefficients across the regions is employed, and this assumption is tested using the SURE estimator. Estimates of a DHSY specification of the consumption function and a model augmented with housing assets are compared. The fixed effects models perform quite well indicating that the growth in regional housing equity has had a positive impact on regional consumer spending. The SURE results indicate that the assumption of common regional responses of consumer spending to the explanatory variables is not valid, and that the housing wealth effect is strongest in...

Aggregate profitability and income distribution in the UK corporate sector, 1963–1985

This paper analyses the secular and cyclical behaviour of the rate of profit for the UK corporate sector from 1962 to 1985, using the growth accounting framework developed by Weisskopf (1979) for the USA, and the labour share decomposition of Henley (1987). The results show that the five per cent per annum decline in net profit rate in the UK over the period is explained in part by each of the three factors of declining profit share, declining capital productivity and, to a lesser extent, declining capacity utilization. As in the USA profitability peaks prematurely in each business cycle as a result of distributional pressure. Further decomposition of these components points to the importance of inadequate growth of real labour productivity as an explanatory factor, and to the inability of firms to protect profit share from the effect of the pre-1979 growing employer labour tax burden. The post-1980 profit revival in the UK is not explained by a ‘breakthrough’ in terms of an improved growth rate of labour...

Monetary Rules Versus Consensual Discretion: Corporatism and the Future of Keynesian Policy-Making

Is there still a role for discretionary Keynesian policy in the 1990s? Or is the problem of inflation so endemic to the Western democratic psyche that in future macroeconomic policy should be the preserve of an impartial monetary technocracy proscribed by fixed monetary rules? By addressing these questions this paper aims to contribute to the debate on the decline of Keynesian economics and the preference of current economic orthodoxy for targeting money rather than real variables. It is now commonplace to point out that the decline of Keynesian demand management was associated with the phenomenon of stagflation, which in turn led to the decline of the social democratic consensus. This consensus had been critical in underpinning Keynesian economics.1 Thus an understanding of the inflation process would seem to be essential to understanding not only the reasons for the Keynesian decline but also the extent to which Keynesian policies can be used in the future restoration of full employment.