DP386 The Implications of British Macroeconomic Policy in the 1930s for Long Run Growth Performance

Author(s): Stephen N Broadberry, Nicholas Crafts
Publication Date: March 1990
Keyword(s): Employment, Productivity, Public Policy
JEL(s): 044, 122, 824, 825
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=386

The paper provides a synthesis of recent research relating to supply side policy in the 1930s in a period when government sought to raise prices given sticky wages. We argue that as a politically constrained strategy to limit rises in unemployment this made sense. A bargaining model approach suggests, however, that this had a harmful impact on productivity growth by stifling competitive pressure and retarding rationalization of old industries.