The Recession of 1980 and its Causes*

During 1980 total output fell by 5% per cent and manufacturing output by 16 per cent. By May 1981 manufacturing output was 20 per cent below its 1979 peak level. in this Briefing Paper we use the London Business School model to explain the current recession. We conclude that the main identifiable came was the rise in the price of oil. but output was also affected by the increase in VAT and the reductions in public investment. Those cawes directly explain a reduction in output of about 3 per cent in 1980 compared with what might otherwise have happened. We suggest that additional links (not fully incorporated into the model) increased the impact of those shocks and led to the severe fall below potential output. The first part of the paper describes briefly the events of I979 and 1980. in the second part we ask how far the economic developments were predictable and in the third part we set out our explanations.     

Population decentralization within metropolitan areas: 1970-1980

Using a data set that maintains geographic and fiscal continuity over time and across a sample of major U.S. metropolitan areas, the authors identify factors of economic and population decentralization that affected central city areas between 1970 and 1980. The problems of annexation are resolved by estimating population changes for central cities and suburban areas with constant 1980 boundaries, and by calculating fiscal variables from overlapping jurisdictions by city area as opposed to municipal city government only. "The empirical investigation supports the view that demographic and housing stock variables seem to have had a greater impact on decentralization than central city-suburban fiscal differences."     

Household formation and suburbanization, 1970-1980

The author attempts to establish whether the recent increases in some population subgroups in central cities in the United States is the start of a trend or a temporary phenomenon. Data are from the 1970 and 1980 censuses. The author concludes that the increase is a temporary one that is primarily due to an increase in the size of certain cohorts. The overriding trend is toward suburbanization, and the author concludes that the increase in central city populations will cease as cohorts decline in size.     

Uncertainty and the Great Recession

Has heightened uncertainty been a major contributor to the Great Recession and the slow recovery in the United States? To answer this question, we identify exogenous changes in six uncertainty proxies and quantify their contributions to GDP growth and the unemployment rate. The answer is no. In total we find that increased macroeconomic and financial uncertainty can explain up to 10% of the drop in GDP at the height of the recession and up to 0.6 percentage points of the increased unemployment rates in 2009 through 2011. Our calculations further suggest that only a minor part of the rise in popular uncertainty measures during the Great Recession was driven by exogenous uncertainty shocks.     

The effect of agricultural price-support policies on interregional and rural-to-urban migration in Korea: 1976-1980

The impact of rice price-support policies, designed to increase farmers' income and reduce rural-urban migration in the Republic of Korea, is examined for the period 1976-1980 using a polytomous logistic model. "Our findings revealed that the elasticity of migration with respect to rice yield per origin farm household is positive and is significantly different from zero. The elasticities of migration with respect to rate of urbanization, particularly urban concentration-agglomeration, and population size of the destination are also positive and are significantly different from zero....Our findings questioned the wisdom of employing rice price price-support programs as a viable policy for reducing interregional and rural-to-urban migration in Korea."     

Outsourcing of Services and the Productivity Recovery in U.S. Manufacturing in the 1980s and 1990s

Manufacturing productivity growth recovered during the 1980s and 1990s, while other sectors, particularly services, did not. In the same period U.S. manufacturing has engaged in the “outsourcing” or “contracting-out” of service functions. Has the recovery of manufacturing been accomplished by industrial reorganization--sloughing off sluggish services--rather than technical progress? We analyze this question by reducing service inputs to their consituent elements of material inputs. Service productivity growth is thus imputed to the goods sectors, reducing the recovery of manufacturing productivity growth in the 1980s by one fifth. The recovery lasted through the 1990s, when high productivity performers in manufacturing have been relatively successful at outsourcing sluggishservices.

     

Recession strategy: renewal efforts up, prospecting down

This computer pro offers insights into non-profit strategy during a recession. Renewals, prospecting, basics, visibility and markedting are keywords to plan a successful route through recessionary periods.     

The Great Recession and Marx's Crisis Theory

To help understand why the Great Recession occurred, this article focuses on its underlying causes and employs Karl Marx's theory of capitalist economic crisis. It shows that U.S. corporations' rate of return on fixed asset investment fell throughout the half‐century preceding the recession, and that this fall accounts for the entire decline in their rate of capital accumulation (productive investment). The investment slowdown led to a decline in the rate of economic growth, which was a main cause of rising debt burdens, as were stimulative fiscal and monetary policies that delayed but exacerbated the effects of the underlying economic problems. The article also refutes the claim that the rate of profit could not really have fallen because massive redistribution of income from wages to profits took place, and it argues that it is unlikely that major crises of capitalism can be eliminated.     

Causes and Cures of the Great Recession

The Great Recession was not a failure of free markets. Rather it was a classic example of the undesirable unintended consequences of government intervention, both through expansionary monetary policy and misguided attempts to bolster the housing market in the USA. Getting government out of banking is the best way to end the disastrous boom and bust cycles that have characterised the last century and a half.     

Antecedents of concession bargaining in the Great Recession: evidence from Ireland

Concession or ‘give back’ bargaining involves firms seeking changes in pay and conditions of employment from trade unions in return for pledges of enhanced job security and sometimes other forms of reciprocation. Several distinct modes of concession bargaining are distinguishable in the literature, and three modes of concession bargaining have been identified in Ireland during the Great Recession: integrative, distributive and minimal engagement. Deploying qualitatively informed quantitative data on the conduct of collective bargaining during the Great Recession, this article examines a series of antecedent influences on the choices firms make in conducting concession bargaining with unions.     

The temporary shutdown decision: Lessons from the Great Recession

The temporary shutdown condition provides guidance on dealing with a serious transitory downturn in demand. The traditional condition says managers should stop production when revenues fall below avoidable costs. This condition is flawed because it ignores how lost human capital and reputational damage harm future profits. As a consequence, firms may optimally operate with losses far larger than stipulated by the traditional condition. We provide the first broad empirical analysis of the temporary shutdown decision, focusing on the Great Recession. We show that large operating losses were common and temporary shutdowns were exceedingly rare, even among very small public firms.