Macro-Economic Policy Objectives

Abstract

The last thirty years have seen a profoundly significant change in the list of agreed macro-economic objectives. Writing in 1931, the Macmillan Committee gave pride of place in their discussion of objectives to the desirability of raising, and then stabilising, the world prices of basic raw materials and foodstuffs, though it recognised that this was as much a matter for international, as for national, action. In the words of the report:

Thus our objective should be, so far as it lies within the power of this country to influence the international price level, first of all to raise prices a long way above the present level and then to maintain them at the level thus reached with as much stability as can be managed.

We recommend that this objective be accepted as the guiding aim of the monetary policy of this country. ...¹