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The fall potential output due to the financial crisis : a much bigger estimate for the UK
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Crafts, N. F. R. (2019) The fall potential output due to the financial crisis : a much bigger estimate for the UK. Comparative Economic Studies, 61 (4). pp. 625-635. doi:10.1057/s41294-019-00094-z ISSN 0888-7233.
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Official URL: https://doi.org/10.1057/s41294-019-00094-z
Abstract
Conventional estimates suggest that the 2007–2009 financial crisis reduced UK potential output by 3.8–7.5% of GDP. This implied a need for fiscal tightening as the structural budget deficit had increased considerably. The austerity that followed led to the rise of UKIP, the EU referendum and the vote for Brexit. Brexit will reduce potential output by somewhere between 3.9 and 8.7% of GDP. Thus, it can be argued that the total fall in UK potential output due to the banking crisis is between 7.7 and 16.2% of GDP—approximately double the conventional estimate.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HB Economic Theory H Social Sciences > HG Finance |
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Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Global Financial Crisis, 2008-2009 , Financial crises , Financial crises -- Great Britain, Bank failures -- Great Britain | ||||||||
Journal or Publication Title: | Comparative Economic Studies | ||||||||
Publisher: | Palgrave Macmillan Ltd. | ||||||||
ISSN: | 0888-7233 | ||||||||
Official Date: | December 2019 | ||||||||
Dates: |
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Volume: | 61 | ||||||||
Number: | 4 | ||||||||
Page Range: | pp. 625-635 | ||||||||
DOI: | 10.1057/s41294-019-00094-z | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Reuse Statement (publisher, data, author rights): | This is a post-peer-review, pre-copyedit version of an article published in Comparative Economic Studies. The final authenticated version is available online at: https://doi.org/10.1057/s41294-019-00094-z | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 22 May 2019 | ||||||||
Date of first compliant Open Access: | 24 May 2020 | ||||||||
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