Were 364 Economists All Wrong?

76 Pages Posted: 11 Apr 2006

See all articles by Philip Booth

Philip Booth

City University London - Sir John Cass Business School

Tim Congdon

Institute of Economic Affairs (IEA)

David Laws

Liberal Democrat Work and Pensions

Patrick Minford

Cardiff University Business School; Centre for Economic Policy Research (CEPR)

Stephen Nickell

University of Oxford - Nuffield College of Medicine; Bank of England - Monetary Policy Committee

Maurice Peston

House of Lords

Derek Scott

Barclays de Zoete Wedd

Geoffrey Wood

Cass Business School

Abstract

In March 1981, 364 economists agreed to write to The Times arguing strongly against the then government's monetary and fiscal policy. However, the Thatcher government decided to ignore these voices and continue the pursuit of policies to defeat inflation and restore fiscal responsibility. To the opponents of the 364, this decision marked a turning point in British post-war economic history: every other post-war government had capitulated and returned to policies of reflation and direct control of prices and incomes in the face of intense political pressures when the going was tough. The 1981 Budget, which precipitated the letter, was also a turning point in other respects: from 1981 there was continual growth, falling inflation and eventually, employment growth. Arguably, the 1981 Budget set the scene for today's benign macro-economic outlook and political consensus in favour of stable prices and fiscal prudence.

Amongst the 364 were many economists who play a very prominent part in public life today. Some dissent from their former views and others continue to justify them. In this publication some of the signatories of the letter to The Times, together with their opponents discuss the key issues raised and its relevance to economic policy today. Included is a list of the original signatories and other relevant historical material.

Keywords: budget, fiscal policy, monetary policy, 1981, Howe

JEL Classification: E2, E42, E60, E62, E64, H5, H6

Suggested Citation

Booth, Philip Mark and Congdon, Tim and Laws, David and Minford, Patrick and Nickell, Stephen and Peston, Maurice and Scott, Derek and Wood, Geoffrey E., Were 364 Economists All Wrong?. Institute of Economic Affairs Monographs, Readings 60, 2006; Cass Business School Research Paper. Available at SSRN: https://ssrn.com/abstract=892579

Philip Mark Booth (Contact Author)

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Tim Congdon

Institute of Economic Affairs (IEA) ( email )

2 Lord North Street
London SW1P 3LB
United Kingdom

David Laws

Liberal Democrat Work and Pensions ( email )

United Kingdom

Patrick Minford

Cardiff University Business School ( email )

Aberconway Building
Colum Drive
Cardiff, CF10 3EU
United Kingdom
+44 29 2087 5728 (Phone)
+44 29 2087 4419 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Stephen Nickell

University of Oxford - Nuffield College of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

Bank of England - Monetary Policy Committee ( email )

Threadneedle Street
London EC2R 8AH
United Kingdom

Maurice Peston

House of Lords ( email )

Parliament Square
London
United Kingdom

Derek Scott

Barclays de Zoete Wedd ( email )

London EC3P 3AH
United Kingdom

Geoffrey E. Wood

Cass Business School ( email )

London, EC2Y 8HB
Great Britain
+44 0 20 7040 8740 (Phone)
+44 0 20 7040 8881 (Fax)

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