Book contents
- Making a Modern Central Bank
- Studies in Macroeconomic History
- Making a Modern Central Bank
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Acknowledgements
- Abbreviations
- 1 Introductory
- 2 Foreign Fetters
- 3 The Performance of the UK Economy
- 4 The Inexplicable in Pursuit of the Uncontrollable
- 5 ‘A Good Deal of Advice’
- 6 The Long Shadow of the Deutschemark
- 7 Hong Kong
- 8 Shaved Eyebrows
- 9 Tunnelling Deep
- 10 Great Leap in the Dark
- 11 The Spine Theory and Its Collapse
- 12 ‘You Can’t Be In and Out at the Same Time’:
- 13 Horses for Courses
- 14 Failure of Internal Communication
- 15 The New Bank
- 16 Epilogue
- Book part
- Notes
- Bibliography
- Index
3 - The Performance of the UK Economy
Published online by Cambridge University Press: 18 September 2020
- Making a Modern Central Bank
- Studies in Macroeconomic History
- Making a Modern Central Bank
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Acknowledgements
- Abbreviations
- 1 Introductory
- 2 Foreign Fetters
- 3 The Performance of the UK Economy
- 4 The Inexplicable in Pursuit of the Uncontrollable
- 5 ‘A Good Deal of Advice’
- 6 The Long Shadow of the Deutschemark
- 7 Hong Kong
- 8 Shaved Eyebrows
- 9 Tunnelling Deep
- 10 Great Leap in the Dark
- 11 The Spine Theory and Its Collapse
- 12 ‘You Can’t Be In and Out at the Same Time’:
- 13 Horses for Courses
- 14 Failure of Internal Communication
- 15 The New Bank
- 16 Epilogue
- Book part
- Notes
- Bibliography
- Index
Summary
A central bank is expected to produce results that are generally beneficial to the people to whom (through parliament) it is accountable. In the late twentieth century, the belief that monetary policy was a tool in fighting short-run economic problems gave way to thinking about monetary stability as providing a framework within which better informed judgements about long-run decisions could be made. The period is punctuated by two traumatic recessions. The early 1980s collapse in large part was the intentional result of a radical change in macro-economic strategy; the second was a product of the aftermath of a loose money period with excessive credit growth and then a collapse of a housing bubble. Both occurred in a wider international economic setting: in the early 1980s in the wake of the second oil price shock and of the 1979 anti-inflationary turn in US monetary policy; in the early 1990s the responses to the fiscal and monetary shock of German unification, a US slowdown and a new oil price spike after the first Gulf War. In both cases, the UK output performance was significantly poorer than that of other major industrial countries.
- Type
- Chapter
- Information
- Making a Modern Central BankThe Bank of England 1979–2003, pp. 43 - 52Publisher: Cambridge University PressPrint publication year: 2020