A Millennium of UK Business Cycles: Insights from Structural VAR Analysis
General Economics
2025-11-20 v1 Economics
Abstract
We study macroeconomic fluctuations in the United Kingdom over seven centuries (1271--2022) using a time-varying VAR with stochastic volatility. We identify business cycle shocks as innovations explaining the largest share of future output variance. Before 1900, these shocks display a stagflationary, supply-driven pattern, while post-1900 shocks become demand-driven, raising both output and inflation. Output volatility declines over time, peaking in the seventeenth century. Monetisation had large real effects in the sixteenth and seventeenth centuries, shifting to more inflationary impacts thereafter. Our results highlight how business cycle dynamics evolve with institutional, monetary, and structural transformations.
Cite
@article{arxiv.2511.15643,
title = {A Millennium of UK Business Cycles: Insights from Structural VAR Analysis},
author = {Leonardo N. Ferreira and Haroon Mumtaz and Gabor Pinter},
journal= {arXiv preprint arXiv:2511.15643},
year = {2025}
}