Gavin Cameron

Technological convergence, R&D, trade and productivity growth

This paper analyses productivity growth in a panel of 14 United Kingdom manufacturing industries since 1970. Innovation and technology transfer provide two potential sources of productivity growth for a country behind the technological frontier. We examine the roles played by research and development (R&D), international trade, and human capital in stimulating each source of productivity growth. Technology transfer is statistically significant and quantitatively important. While R&D raises rates of innovation, international trade enhances the speed of technology transfer. Human capital primarily affects output through private rates of return (captured in our index of labour quality) rather than measured TFP.

The Housing Market and Regional Commuting and Migration Choices

Inter-regional migration is influenced by relative employment and earnings opportunities. But strongly offsetting forces operate from relative house prices. Commuting, at least to contiguous regions, is often an alternative to migration. Relative employment and earnings opportunities should influence commuting rates in the same direction as migration rates. Given the commute/migrate trade-off, however, housing market forces should operate in the opposite direction, particularly for contiguous regions. This paper presents evidence on inter-regional commuting and migration in Great Britain which is broadly in accord with these expectations. Data for the 1980s and 1990s on net commuting are derived from the ratios of numbers of employees resident in a region to the number employed in that region using Labour Force Survey and Census of Employment data. Information on migration comes from the National Health Service Central Register. Given the evidence for the importance of portfolio demand and speculative volatility in the British housing market presented in Muellbauer and Murphy (1997), this paper documents the important transmission effects via regional labour markets, for example, increasing regional mismatch, of the forces that drive house prices in Britain. The paper suggests tax reforms which should ameliorate these problems.

Data Feature: Earnings Biases in the United Kingdom Regional Accounts: Some Economic Policy and Research Implications

Between the late 1970s and late 1980s, the UK Regional Accounts data suggest a much smaller rise in the South East earnings premium and consequently a much smaller increase in the regional dispersion of earnings than do the other sources of data. We discuss several possible explanations for this discrepancy and conclude it was probably due to problems at the Inland Revenue in allocating tax records across the regions. The historical unreliability of the Regional Accounts has implications for economic research on regional consumption and convergence and may have caused the poorest regions to miss out on EU Structural Funds.

Openness and its Association with Productivity Growth in UK Manufacturing Industry

A large theoretical literature exists that suggests that differences in growth performance may be related to variations in the extent of international openness. This paper is concerned with quantifying measures of openness and examining their association with productivity growth across 19 sectors in UK manufacturing between 1970 and 1992. Using the statistical technique of discriminant analysis, sectors were sorted into groups on the basis of their measured values of openness in 1970. Sectors classified as relatively open enjoyed significantly higher rates of total factor productivity (TFP) growth between 1970 and 1992 than those classified as closed. There was a positive correlation between the growth in labour productivity and lagged values of each of the observed measures of openness. This relationship was explained by a strong relationship between lagged values of openness and TFP growth. But, there was no evidence of a positive relationship between openness and that part of labour productivity growth explained by capital accumulation.

Deconstructing Growth in UK Manufacturing

This paper is concerned with the nature of economic growth in 19 manufacturing industries between 1970-92. There is substantial heterogeneity (both across sectors and time) in rates of growth of value-added, hours worked, labour productivity and Total Factor Productivity during the sample period. The decline in constant price value-added in aggregate manufacturing during the sample period is associated with significant changes in the relative size of individual sectors, and with noticeable changes in performance between the two peak-to-peak business cycles 1973-79 and 1979-89. Despite changes in the relative size of sectors, the vast majority of aggregate productivity growth is explained by within-sector productivity growth. An analysis of productivity levels also reveals considerable heterogeneity. The distribution of productivity levels across sectors exhibits an increase in dispersion and becomes increasingly positively skewed during the sample period. There is evidence of productivity levels in a number of industries converging at values just below the mean; productivity levels in a few sectors persistently remain above and rise away from mean values.

SOVEREIGN RISK IN THE CLASSICAL GOLD STANDARD ERA

This paper reassesses the determinants of sovereign bond yields during the classical gold standard period (1872–1913) using the pooled mean group methodology. We find that, rather than lowering risk premia directly, membership of the gold standard hastened the convergence of sovereign bond spreads to their long-run equilibrium levels. Our results also suggest that investors looked beyond the gold standard to country-specific fundamental factors when pricing and differentiating sovereign risk.

TECHNOLOGY SHOPS: EFFICIENT PRICING IN BUSINESS-UNIVERSITY COLLABORATIONS

Recently, business–university collaborations have become the subject of much interest. It is important to distinguish between ‘blue-sky’ research and more directly commercially applicable research. This paper provides a framework in which to think about the latter. A simple screening model is proposed to study the ways in which a university might sell its research to the private sector. It demonstrates that ‘technology shops’, where firms pay a fixed fee to join and a relatively low marginal cost for each piece of research, would increase the amount of research commercially developed and would be beneficial to all parties.

classical economics and economic growth

The analysis of economic growth was an important feature of the writings of the great classical economists, including Adam Smith, Thomas Malthus, David Ricardo, John Stuart Mill and Karl Marx.