The Thatcher Miracle?

Richard Layard and Stephen Nickell ()

No 315, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Since 1979 productivity growth in Britain has improved markedly compared with Europe. The turnaround in productivity growth has two main causes. The British economy was subjected to a far more severe contraction of demand in 1980-81 than any other country. This led to a new realism, which was sustained by the legal changes in trade union power. Since 1979 there has been a worsening in the trade-off between unemployment and inflation. The poor unemployment/inflation trade-off is due to the neglect of skill training and education (causing skill shortages) and to the build-up of long-term unemployment (which does little to restrain inflation).

Keywords: Inflation; Productivity; Trade Unions; Unemployment; United Kingdom (search for similar items in EconPapers)
Date: 1989-04
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Working Paper: THE THATCHER MIRACLE? (1989)
Journal Article: The Thatcher Miracle? (1989)
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