Measuring output trends using actual and expected output in UK manufacturing, 1975-98

Abstract

Direct measures of expectations, derived from survey data, are used in a vector autoregressive (VAR) model of actual and expected output series in eight industrial sectors comprising UK manufacturing. Through the application of the Beveridge-Nelson decomposition, the VAR model is used to measure trend output in the manufacturing sector. This measure is compared with alternative trend measures obtained using aggregate manufacturing sector data only. © Blackwell Publishers Ltd and The Victoria University of Manchester, 2000. Published by Blackwell Publishers Ltd,.