British inflation and unemployment in the 1970s: a model-based decomposition

Matthews, Kent Gerard Patrick ORCID: https://orcid.org/0000-0001-6968-3098 and Minford, Anthony Patrick Leslie ORCID: https://orcid.org/0000-0003-2499-935X 1996. British inflation and unemployment in the 1970s: a model-based decomposition. Applied Economics 28 (1) , pp. 103-115. 10.1080/00036849600000013

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Abstract

The UKs stagflation in the 1970s is decomposed into its causative factors, using the Liverpool rational expectations model. It is found that there was a large rise in the natural rate of unemployment, mainly due to rising union density; that fiscal and monetary shocks had little effect on the resulting rise in unemployment; and the high inflation of the period was due to persistent and large fiscal deficits, with their accompanying monetization. Mrs Thatcher inherited an inflation induced by an ongoing deficit and a natural rate of over 2 million unemployed.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Schools > Business (Including Economics)
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor
Publisher:	Taylor & Francis
ISSN:	0003-6846
Last Modified:	24 Oct 2022 11:04
URI:	https://orca.cardiff.ac.uk/id/eprint/46837

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