Structural Change and Economic Behaviour: The Case of UK Exports

Abstract

In this paper, we make use of the sequential testing procedure which dates unknown break points proposed in Banerjee and Urga (1995,a,b) to analyze UK export behaviour. We show that the evidence points to a structural shift in 1979. Although there is some support for a supply-side interpretation in that there have been changes in the behaviour of prices, this does not appear to be closely associated with the changes in export behaviour and there appears to have also been a shift in the underlying demand for UK exports. We also find that variables that proxy changes in the quality of UK exports, or other supply-side influences, do not properly account for the observed structural break in UK export performance.