Long-term Growth and Short-term Policy

Abstract

One of the main aims of short-term economic policy in Britain has been to regulate the pressure of demand for labour, and to keep the fluctuations of the unemployment percentage within fairly narrow limits. High unemployment is obviously undesirable; at the other end of the scale, if the pressure of demand for labour is too strong, this tends to lead to excessively high wage increases and to balanceof-payments difficulties. It is for the government to decide at what pressure it wishes to run the economy, and to try to keep it there.

First published 1964.

This article owes a great deal to some unpublished work of Mr W. A. B. Hopkin of the Treasury, which provided some of the basic ideas and indicated a method of estimating the relationships.