The changes in economic policy introduced in the UK after 1979 had substantial impacts on income distribution, unemployment and productivity growth. In Discussion Paper No. 710, Research Fellow Nicholas Crafts reviews the available evidence to evaluate the welfare effects of the Thatcher reforms. He finds the estimated impact to be highly sensitive to the degree of `inequality aversion' of the investigator and to the chosen method of estimating the counterfactual productivity path. The overall welfare effect may have been either negative or positive but it is probably smaller than partisan assessments have claimed.

Nicholas Crafts presented this paper at an October lunchtime meeting, reported in more detail in this issue of the Bulletin.

Was the Thatcher Experiment Worth it? British Economic Growth in a European Context
Nicholas F R Crafts

Discussion Paper No. 710, August 1992 (HR)