Appendix M Productivity Trends Within the Period 1924-1937The experience of the 1920's and the 1930's differend in many respects, not least in government policy, and it is therefore interesting to compare the behavior of productivity in the two periods 1924-29 and 1929-37 (1929 being the relevant cycle peak). Unfortunately, there are several obstacles:
|(1) Data on hours of work are not available for 1929, since the relevant survey appears not to have been conducted in that year. TFI must therefore be calculated on the basis of man-years, not man-hours, and TFP likewise. The growth of TFP is consequently overstated for either 1924-29 or 1929-37, or both, since between 1924 and 1937 hours of work increased somewhat.|
|(2) More important, there are large divergencies between the alternative indicators of GDP (see Table M.1 .). The output measure shows the 1930's in a much less unfavorable light relative to the 1920's than the income and expenditure measures, and hence the compromise measure. This requires to be borne in mind in studying sectoral measures, which necessarily come from the output side.|
|(3) Revisions are not available of the estimates in Feinstein 1965 of the interwar capital stock for individual manufacturing industries, consistent with his revision for total manufacturing.|
With these qualifications in mind, the following conclusions from Tables M.1-M.3 may be noted.
|(4) In addition to the above statistical problems, there are problems of interpretation. Though the unemployment rate was much the same in 1924, 1929, and 1937, none of those years had anything near to full employment, and there were substantial differences between industries in the time patterns of the movement of demand relative to supply. It cannot be assumed that the effects of these differences on productivity were neutral even at the aggregate level. Some of the observed sectoral differences in the rate of growth of productivity between 1924-29 and 1929-37 undoubtedly reflected cyclical-type forces rather than long-run trends. This applies in some degree to 1924-37 as a whole, but not so much.|
|(1) TFP in the economy as a whole grew faster in 1924-29 than in 1929-37 (Table M.1). |
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: British Economic Growth, 1856-1973.
Contributors: R. C. O. Matthews - Author, C. H. Feinstein - Author, J. Odling-Smee - Author.
Place of publication: Oxford, England.
Publication year: 1982.
Page number: 608.
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