12 March 2008
Resilience in the UK and other OECD economies: Treasury Economic Working Paper No.2
All economies need continually to respond to shocks that arise, for example, from technological progress or from changes in the relative growth rates of demand for individual goods and services. Resilience describes the ability of an economy to maintain levels of employment and keep actual output close to its potential level in the face of such shocks. This paper presents two measures of resilience exhibited by 14 OECD economies over the past 25 years. These show that there has been a general improvement in resilience across the countries in the study, and a marked improvement in the United Kingdom. Regression analysis indicates that this has been associated both with improved macroeconomic policy, proxied by lower long-term interest rates, and by less stringent labour and product market legislation, as measured by the OECD.
Resilience in the UK and other OECD economies: Treasury Economic Working Paper No.2 is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
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