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Has the growth of real GDP in the UK been overstated because of mis-measurement of banking output?

Oulton, Nicholas (2013) Has the growth of real GDP in the UK been overstated because of mis-measurement of banking output? Centre for Economic Performance occasional papers, CEPOP33. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

If official figures overstated the growth of banking output in the UK in the recent boom, does this mean that GDP growth was overstated too? The answer is no. It is truer to say that if banking output was overstated then the output of some other industry or industries must have been understated, leaving GDP relatively unaffected. The reason is that the Office for National Statistics measures the real growth of GDP primarily from the expenditure side. And from the expenditure side most of the problematic part of banking output drops out since it constitutes intermediate consumption not final expenditure. Consequently, the effect of any mis-measurement of banking output on GDP growth in the boom of 2000-2007 is likely to have been small: GDP growth might have been overstated by about 0.1% p.a.

Item Type: Monograph (Other)
Official URL: http://cep.lse.ac.uk/_new/publications/abstract.as...
Additional Information: © 2013 The Author
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: E - Macroeconomics and Monetary Economics > E0 - General > E01 - Measurement and Data on National Income and Product Accounts and Wealth
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: CEPOP33
Date Deposited: 21 Mar 2013 16:14
URL: http://eprints.lse.ac.uk/49352/

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