Long-run equilibrium ratios of business investment to output in the United Kingdom

Quarterly Bulletin 2003 Q2
Published on 20 June 2003

By Colin Ellis and Charlotta Groth of the Bank's Structural Economic Analysis Division. 

Over the past 20 years, the constant-price and current-price ratios of business investment to total output have behaved very differently. In this article we use a simple framework to examine how these two ratios should behave in long-run equilibrium. We investigate the conditions in which each ratio will be constant and, more generally, consider how each might evolve over time.

PDFLong-run equilibrium ratios of business investment to output in the United Kingdom

 

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