Economic History Lesson
Nigel Lawson, Financial Secretary to the Treasury 1979-81 (second from left in picture), told Treasury civil servants at a seminar organised by the Mile End Group two weeks ago (but online only today):
There’s a reason why you today can feel confident … Based on the example of what we did in the 1980s, squeezing public expenditure will produce the result you would like it to produce, and you don’t have to worry about the Krugmans, or our English equivalents sitting in the front row here.
We should set this as an exam question for new recruits to the Treasury: List the ways in which the situation in 1981 and 2013 is different, and why Lord Lawson’s reassurance might not be justified.
A higher level question for a possible distinction: If the economy does grow faster than expected, 2013-15, would that be because of or despite the fiscal tightening of 2010-13?Tagged in: contemporary history, economics
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