Picture of UK Houses of Parliament

Leading national thinking on politics, government & public policy through Open Access research

Strathprints makes available scholarly Open Access content by researchers in the School of Government & Public Policy, based within the Faculty of Humanities & Social Sciences.

Research here is 1st in Scotland for research intensity and spans a wide range of domains. The Department of Politics demonstrates expertise in understanding parties, elections and public opinion, with additional emphases on political economy, institutions and international relations. This international angle is reflected in the European Policies Research Centre (EPRC) which conducts comparative research on public policy. Meanwhile, the Centre for Energy Policy provides independent expertise on energy, working across multidisciplinary groups to shape policy for a low carbon economy.

Explore the Open Access research of the School of Government & Public Policy. Or explore all of Strathclyde's Open Access research...

Fraser of Allander Institute : Economic Commentary [June 2015]

Fraser of Allander Institute (2015) Fraser of Allander Institute : Economic Commentary [June 2015]. [Report]

[img]
Preview
Text (FAI-2015-39-1-Fraser-of-Allander-Economic-Commentary)
FAI_2015_39_1_Fraser_of_Allander_Economic_Commentary.pdf
Final Published Version

Download (2MB)| Preview

    Abstract

    The Scottish and UK economies are continuing to grow and recover from the Great Recession. With growth of 0.6% in the final quarter of last year (2014) – the latest data point - the Scottish economy has now enjoyed positive growth for the last 11 quarters (since 2012q1) while in the UK, also with growth of 0.6% in 2014q4, the sustained recovery period has been shorter at 8 quarters. The introduction of a new system of accounts ESA 2010 has brought in to the production calculus some activities (such as research and development and military expenditure) that were not previously treated as outputs alongside the inclusion of previously uncounted ones (such as illegal activities). In consequence, the nominal value of GDP has risen by around 1 to 4% per year due to the addition of these new activities within the production boundary. A further consequence of these accounting changes is that the extent of the recovery from recession is now greater in both UK and Scotland but it i s stronger in the UK. When o il and gas production is removed – to compare like with like, since offshore activity is included in the UK but not the Scottish GDP data - we find that the gap in the strength of the recovery widens further in the UK’s favour. UK GDP stands 5.1% above the pre -recession peak compared to only 2.3% in Scotland. We speculate that the relatively stronger UK recovery under the new accounting system could be due to the recovery in R&D activity being stronger in the rest of the UK after the recession than in Scotl and and, if so, may not augur well for Scotland’s growth performance in the longer term. However, there may simply be a technical rather than an economic cause due, for example, to different sub-sectoral weights between Scotland and the UK.