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The British growth malaise
One of the bigger puzzles in macroeconomics is the productivity stagnation that has taken a hold on advanced economies. Despite all the technological improvements, productivity growth has been extremely slow since the early 2000s. The U.K. has been particularly severely affected by this malaise with productivity advancing at a snail’s pace since the Financial Crisis.
Productivity in the U.K. is now more than 15% below pre-crisis trend, which matters tremendously because productivity growth is by far most important factor affecting living standards. Inflation-adjusted incomes have been extremely stagnant in recent history precisely because U.K. workers have