Hostname: page-component-848d4c4894-2xdlg Total loading time: 0 Render date: 2024-07-07T17:08:36.512Z Has data issue: false hasContentIssue false
  • English
  • Français

The Effects of Economic Policy 1979-82

Published online by Cambridge University Press:  26 March 2020

M.J. Artis ,
R. Bladen-Hovell ,
E. Karakitsos  and
B. Dwolatzky
M.J. Artis
Affiliation:
Unversity of Manchester
R. Bladen-Hovell
Affiliation:
Unversity of Manchester
E. Karakitsos
Affiliation:
Imperial College, London
B. Dwolatzky
Affiliation:
Imperial College, London
Get access Rights & Permissions [Opens in a new window]

Extract

The central purpose of this article is to provide measures of the effect of fiscal and monetary policy in the period 1979-82, using for the purpose information derived from simulations of two macroeconometric models of the British economy, those of HM Treasury and the National Institute of Economic and Social Research. The methodology employed is explained in detail in the next section, which is succeeded by a discussion of its implementation in the second section of the article. The principal results of the analysis are then set out in the third section of the article. The period under consideration has been marked by a severe recession, to which domestic economic policy has not been the only contributor; in the fourth section of the article we therefore consider the additional influence of world factors. In the fifth section we go on to consider an extension of the policy measures to take account of exchange rate policy. There is a final section of conclusions which assesses the contribution of government policy and the downturn in world trade to the shortfall of output below its trend value. An appendix provides additional technical detail whilst more complete tabulations of the results are available on request from the authors.

Type
Articles
Information
National Institute Economic Review , Volume 108 , May 1984 , pp. 54 - 67
Copyright
Copyright © 1984 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Argy, V. (1983), ‘Design of monetary and fiscal policy— the experience of four “conservative” administrations’, Macquarie University Centre for Studies in Money, Banking and Finance, Working Paper 8315-A.Google Scholar
Artis, M.J. and Bladen-Hovell, R.C. (1984), ‘Monetarist macroeconomics in practice: the first Thatcher Government 1979-1982’, Socialist Economic Review, London, forthcoming.Google Scholar
Artis, M.J. and Green, C.J. (1982), ‘Using the Treasury model to measure the impact of fiscal policy, 1974-1979’, in M. J. Artis et al. (eds.), Demand Management, Supply Constraints and Inflation, Manchester University Press, pp. 30–47.Google Scholar
Artis, M.J., Bladen-Hovell, R.C. and Green, C.J. (1984), ‘Crowding out in the Treasury model: the effect of specification change’, in M. Brech and D. Morris (eds.), Econometric Models of the UK: their development and use, (NEDO, forthcoming).Google Scholar
Bank of England (1981), ‘Factors underlying the recent recession’, Papers presented to the Panel of Academic Consultants, no. 15, July.Google Scholar
Bladen-Hovell, R.C., Green, C.J. and Savage, D. (1982), ‘The transmission mechanism of monetary policy in two large-scale models of the UK economy’, Oxford Bulletin of Economics and Statistics, 44, February, pp. 15–30.CrossRefGoogle Scholar
Blinder, A.S. and Goldfeld, S.M. (1976), ‘New measures of fiscal and monetary policy, 1958-73’, American Economic Review, 66, December, pp. 780–96.Google Scholar
Britton, A. (1983), Employment, Output and Inflation: The National Institute Model of the British Economy, Heinemann.Google Scholar
Britton, A. and Whittaker, R. (1982), The tracking performance of the Treasury model, part I studies in macroeconomic forecasting and model building, Government Economic Service Working Paper, no. 58.Google Scholar
Brooks, S. and Henry, B. (1983), ‘Re-estimation of the National Institute Model’, National Institute Economic Review, no. 103, February.CrossRefGoogle Scholar
Buiter, W.H. (1981), Memorandum on competitiveness, in Minutes of Evidence, Monetary Policy, 1980-81, vol. III, Report, London: HMSO.Google Scholar
Buiter, W.H. and Miller, M.H. (1982), ‘The Thatcher experiment: the first two years’, Brookings Papers in Economic Activity, no. 2.CrossRefGoogle Scholar
Corden, W.M. (1981), ‘Taxation, real wage rigidity and employment’, Economic Journal, June, pp. 309–330.CrossRefGoogle Scholar
Fforde, J.S. (1983), ‘Setting monetary objectives’, Quarterly Bulletin of the Bank of England, June, pp. 200–208.Google Scholar
Godley, W.A.H. and Hopkin, W.A.B. (1965), ‘An analysis of tax changes’, National Institute Economic Review, no. 32, May, pp. 33–42.Google Scholar
Treasury, H.M. (1983), Macroeconomic Model Technical Manual and Equation Listing.Google Scholar
Lucas, R.E. jr. (1976), ‘Econometric policy evaluation: a critique’, in Brunner, K. and Meltzer, A. (eds.), The Phillips Curve and Labour Markets, Amsterdam, North-Holland, pp. 19–46.CrossRefGoogle Scholar
McKinnon, R. (1981), ‘The exchange rate and macroeconomic policy: changing postwar perceptions’, Journal of Economic Literature, vol. XIX, June, pp. 531–537.Google Scholar
National Institute of Economic and Social Research (1983), National Institute Model 6, London.Google Scholar
Niehans, J. (1981), ‘The appreciation of sterling— causes, effects, policies’, SSRC Money Study Group Discussion Paper.Google Scholar
Sims, A.H. (1982), ‘Policy analysis with econometric models’, Brookings Papers in Economic Activity, no. 1, pp. 107–164.CrossRefGoogle Scholar
Tobin, J. (1969), ‘Asset holdings and spending decisions’, American Economic Review, vol. 42, May, pp. 109–123.Google Scholar
Tobin, J. and Brainard, W. (1968), ‘Pitfalls in financial model building’, American Economic Review, papers and procedings, 58, May, pp. 99–122.Google Scholar
Wren-Lewis, S. (1982), ‘A model of private sector earnings behaviour’, Government Economic Service Paper, no. 57.Google Scholar