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The Political Economy of the UK, 1979–2002

  • Jonathan Michie

Abstract

The first Thatcher Government was elected in 1979 on the promise of squeezing inflation out of the system – permanently. How did she and her Government propose to do this, given the reluctance to use the structures and policies of the European Community, as it then was? The answer was monetarism: the control of the money supply. The theory – as espoused by Nobel Prize winning economist Professor Milton Friedman – was that since the stock of money multiplied by the number of times that stock circulates each year must by definition equal the quantity of goods and services bought during that period times their price, if you reduced (the growth of) the money supply, you must also thereby reduce (the growth of) prices.

Keywords

Labor Market Interest Rate Real Wage Money Supply Labor Market Policy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Jonathan Michie 2005

Authors and Affiliations

  • Jonathan Michie

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