How Mrs Thatcher smashed the Keynesian consensus

Greg Ip

Apr 9th 2013, 14:13 by G.I. | WASHINGTON, D.C.

[Greg Ip] In March 1981, 364 eminent British economists published a letter to Margaret Thatcher in The Times condemning her plans to hike taxes even as her monetarist attack on inflation plunged the economy ever deeper into recession. The signatories wrote:

There is no basis in economic theory or supporting evidence for the Government’s belief that by deflating demand they will bring inflation permanently under control and thereby induce an automatic recovery in output and employment … [P]resent politics will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.

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About Jim Rose

Utopia - you are standing in it promotes a classical liberal view of the world and champion the mass flourishing of humanity through capitalism and the rule of law. The origin of the blog is explained in the first blog post at https://utopiayouarestandinginit.wordpress.com/2014/03/12/why-call-my-blog-utopia-you-are-standing-in-it/

1 thought on “How Mrs Thatcher smashed the Keynesian consensus

  1. Sorry but the 364 economists were correct and thatcher wrong. She slowed the economy.
    Simon Wren-Lewis has shown this numerous times

    Like

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