Segmented trends and the stochastic properties of UK output

Abstract

This letter confirms that annual UK output suffers a break in trend in 1918 as suggested by Duck (1992). It then goes on to show that a segmented trend model with two breaks, in 1918 and 1921, with trend growth of approximately 2% and 2.25% per annum before and after these breaks, and with a cyclical component having a period of approximately 8 years, provides an excellent fit to the series.