Tag: Firm-level data

Selling England (no longer) by the pound: currency-mismatches and the dollarisation of UK exports

Marco Garofalo, Giovanni Rosso and Roger Vicquery

Most international trade is denominated in dominant currencies such as the US dollar. What explains the adoption of dominant currency pricing and what are its macroeconomic implications? In a recent paper, we explore a rare instance of transition in aggregate export invoicing patterns. In the aftermath of the depreciation that followed the Brexit referendum in 2016, UK exporters progressively shifted to invoicing most of their exports in dollars, rather than in pounds. This was driven by firms more exposed to currency mismatches, eg exporting in pounds but importing in dollars before the depreciation. As a result of this aggregate transition to dollar pricing, a dollar appreciation now depresses demand for UK exports by twice as much than before 2016. 

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How important are large firms for aggregate productivity growth in the UK?

Marko Melolinna

Aggregate labour productivity growth has been low in the UK following the global financial crisis in 2008 (Chart 1). The average annual growth rate has been only 0.7% over the period 2008 to 2019, which is around a third of the growth rate seen during the decade preceding the crisis. There are many ways of analysing the reasons for this weakness, but in this blog post, I concentrate on examining the role that the largest firms in the UK have played in the story. Our analysis covering the past three decades from 1990 to 2017 suggests that firm-specific, or idiosyncratic, shocks to the 100 largest firms had a significant effect on aggregate productivity dynamics in the UK.

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