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Chapter I. The Home Economy

Published online by Cambridge University Press:  26 March 2020

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Extract

There is not much doubt that total output stopped falling around the middle of 1981 and that there has been some increase since. But it is not easy to say how large the increase has been. This is both because the three methods of measuring GDP give different results and because the evidence changes as the figures are revised. Table 1 shows the three different estimates from the first quarter of 1981 as they appeared in the last three sets of National Accounts.

Type
Articles
Information
National Institute Economic Review , Volume 104 , May 1983 , pp. 6 - 20
Copyright
Copyright © 1983 National Institute of Economic and Social Research

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References

Note (1) page 9 This does not include the 0.3-0.4 per cent increase in prices caused by the indexation of excise duties, which does not qualify as a policy change.

Note (2) page 9 'It is sometimes suggested that countries which have made most progress against inflation should speed the recovery process by resorting to reflation. But nothing could be more dangerous for recovery.

Lower inflation and lower interest rates are themselves the right foundations for economic recovery, a recovery that can be sus tained. The days when governments by spending more could guarantee to boost activity are far behind us.'

Note (1) page 12 On the ‘wage bill per head’ definition shown in tables 6 and 7. The increase in the Department of Employment's index may be slightly higher.

Note (2) page 12 A short description may be found in the February Review, pp. 62-3.

Note (1) page 13 We conclude from our econometric work that the pressure of demand has a significant effect on prices in the expected direction, but that the effect is not large.

Note (1) page 15 The equation's under-prediction in the second half of last year, to which we drew attention in the February Review (page 24), has now been largely resolved by upward revisions to real personal disposable income.

Note (1) page 16 To be more explicit, we brought the ‘residual’ on the equation (£185 million, at 1975 prices, in the first quarter) back to zero by the end of the year.

Note (2) page 16 The CBI series is more closely related to nominal than to real expenditure. A lead slightly longer than a year over actual expenditure would be expected since the question refers to ‘authorisations’ rather than to expenditure as such.