⁽¹⁾ It is possible, given the audience to which it was addressed, that the emphasis placed on certain elements of the strategy in the Letter differed from the emphasis which would have been given to a domestic audience. But the main strands were all in the Letter, and it makes a convenient reference point.

⁽¹⁾ The resemblance of the ‘crowding out’ doctrine, in its cruder forms, to the long-discredited ‘Treasury doctrine’ of the 1930s scarcely needs pointing out. That apart, it is also worth stressing that an increase in the public sector's debt issue need not necessarily raise interest rates. Movements in interest rates are heavily influenced by expectations of future changes in rates; the size of new issues is one influence on these expectations, but only one.

⁽¹⁾ ‘Money supply and domestic credit’, Economic Trends, May 1969; M. J. Artis and A. R. Nobay, ‘Two Aspects of the Monetary Debate’, National Institute Economic Review no. 49, August 1969; and ‘Domestic credit expansion’, Bank of England Quarterly Bulletin, September 1969.

⁽²⁾ See, for example, Artis and Nobay op. cit, page 46.

⁽¹⁾ E. Cary Brown, ‘Fiscal Policy in the Thirties : a Reappraisal’, American Economic Review, December 1956.

⁽¹⁾ These figures are quoted by F. T. Blackaby, ‘The target rate of unemployment’, in G. D. N. Worswick (ed.), The concept and measurement of involuntary unemployment (1976).

⁽²⁾ These studies are, respectively: D. E. W. Laidler, ‘The end of demand management: how to reduce unemployment in the 1970s’, appended to M. Friedman, ‘Unemployment versus inflation?’, (I.E.A., 1975); J. M. Parkin, M. T. Sumner and R. Ward, ‘The effects of excess demand, generalised expectations and wage-price controls on wage inflation in the UK’, in K. Brunner and A. H. Meltzer (eds.), Proceedings of the 1974 Carnegie Rochester Conference on Economic Policy (forthcoming); P. G. Saunders, ‘The expectations hypothesis and the natural rate of unemployment’, University of Stirling Discussion Paper (1974).

⁽³⁾ M. R. Gray, J. M. Parkin and M. T. Sumner, ‘Inflation in the UK: causes and transmission mechanisms’, University of Manchester discussion paper (1975), estimate a natural rate of 1.8 per cent for 1952-67, rising to 3.7 per cent for 1968-74. But this jump is attributed to ‘changes in unemploy ment and redundancy benefit in 1967’ which in fact took place in 1966, and which are not regarded as likely to have shifted the natural rate by anything like 2 per cent-see below, pages 48-50.

⁽⁴⁾ It is, however, worth noting that whatever academic monetarists may say, politicians and commentators sympa thetic to the monetarist approach have for some time suggested that unemployment in Britain cannot now be reduced much below 1 million (nearly 4 1/2 per cent).

⁽⁵⁾ The Working Party report was summarised in an article with the same title in the October 1976 Department of Employment Gazette.

⁽⁶⁾ ‘Effects of the Redundancy Payments Act’, Office of Population Censuses and Surveys, 1971.

⁽⁷⁾ D. Mackay and G. Reid, ‘Redundancy, unemployment and manpower policy’, Economic Journal, December 1972.

⁽¹⁾ S. Brittan, ‘Full employment policy; a reappraisal’, in Worswick, op. cit.

⁽²⁾ See the Working Party's analysis of standard rates of benefit in its Annex 3.

⁽³⁾ See A. Evans, ‘Notes on the changing relationship between registered unemployment and notified vacancies, 1961-66 and 1966-71’, Centre for Environmental Studies, December 1975, and ‘The unregistered unemployed in Great Britain’, Department of Employment Gazette, December 1976.

⁽⁴⁾ See J. Wood, ‘How much unemployment?’, Institute of Economic Affairs, 1972, and ‘Report of the Committee on the Abuse of Social Security Benefits’, Cmnd 5228, HMSO, 1973.

⁽¹⁾ These reservations are briefly that: (a) vacancies were influenced over the period by the increased publicity and money given to the public employment services; (b) overtime hours may have increased because of secular declines in the standard working week; (c) CBI replies are subjective; (d) the Bank measure ceased in 1973 II, and (e) trends-through-peaks procedures assume full capacity at each peak.

⁽²⁾ There is no doubt from reading the Bank of England's Quarterly Bulletins for September 1973, especially the section on ‘Indicators of the pressure of demand’, and December 1973, that the Bank believed that capacity had been pushed to its limits.

⁽³⁾ Bank of England Quarterly Bulletin, December 1973.

⁽¹⁾ These rules of thumb are that the elasticity of employment with respect to output during the cycle is about 0.7, and that about one in three workers hired was not on the unemployment register.

⁽¹⁾ 7.4 barrels = 1 tonne is used for all conversions. The density varies, but this is about right for most North Sea oils although slightly light for average imported oils. Metric tonnes are used unless otherwise indicated.

⁽²⁾ The oil industry distinction for reserves is ‘proved’ (virtually certain to be developed), ‘probable’ (a more than 50 per cent chance) and ‘possible’ (significant, but less than 50 per cent chance).

⁽¹⁾ The most recent official estimate of the value seems to assume 4 billion, and 2 billion tonnes of oil equivalent (t.o.e.) of gas (Dickson Mabon), quoted in The Times, 8 December 1976).

⁽²⁾ BP, Statistical review of the world oil industry 1975.

⁽¹⁾ The actual differential implied by the trade statistics in c.i.f. and f.o.b. terms is $1.10 a barrel, while the figures given in the text imply about 45 cents. The latter seems to us the more reasonable estimate.

⁽²⁾ The effects of oil price changes at different stages of development are discussed in C. Robinson and J. Morgan, ‘World oil prices and the profitability of North Sea oil’, Petroleum Review, April 1976.

⁽¹⁾ Governor of the Bank of England, speech on 1 February 1977.