Investigating Structural Breaks in UK Manufacturing Trade

Sequential break-dating procedures, proposed in Banerjee and Urga (1995a,b), allow breaks to be determined by the data, avoiding a priori imposition. In this paper, the methods are brieey introduced and then utilised to analyse UK foreign trade within the context of the LBS model. The break-dates for both imports and exports equations are robust to a range of sensitivity analyses, are found at economically interpretable periods and link-up well with previous research on this subject. We are very grateful to the ESRC for funding this project under various grants held at the Institute of Economics and Statistics, Oxford and the Center for Economic Forecasting (London Business School). The authors also wish to thank Steven Hall for comments and helpful suggestions and Niels Buhl for research assistance. The usual disclaimer applies.