The Gathering Clouds

Part of the Economics Today book series (ET)


To the untutored eye, the period of the 1950s and 1960s, right through to the break-up of the Bretton Woods system, appears as a halcyon period of steady growth, low unemployment and low inflation. The problem, as suggested in the previous chapter, was that it was not at all clear whether the situation was the result of demand management policy or despite it. Even to the contemporary policy-maker, the period was one of limited success. The UK was too often unfavourably compared with the rest of Europe, the course of the economy was frequently interrupted by balance of payments crises, fears of inflation and by the end of the period, even a deterioration in the unemployment position. The recurrence of the balance of payments problems constrained domestic demand policies, resulting in the ‘stop-go’ cycle.


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© Kent Matthews 1994

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