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100th Issue of the Review : The Nature of the Inflation Process

Published online by Cambridge University Press:  26 March 2020

J.A. Bispham
J.A. Bispham*
Affiliation:
Bank for International Settlements, Basle
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Extract

This short essay begins by contrasting—in a rather broad brush manner—the two major types of explanation of the core of inflation in the United Kingdom. At one time these might have been labelled cost-push and demand-pull. It is now recognised, however, that the distinction cannot be made quite so sharply. It is perhaps better to speak of degrees of exogeneity of inflation—independence, that is, from other purely economic factors such as the pressure of demand and unemployment. The case of those who see important exogenous push elements in inflation may be labelled the eclectic—or, perhaps, the newspaper reader's—view. The other comprises the rather academic set of views associated with monetarist economists.

Type
Articles
Information
National Institute Economic Review , Volume 100 , May 1982 , pp. 8 - 13
Copyright
Copyright © 1982 National Institute of Economic and Social Research

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Footnotes

(1)

The author writes in a personal capacity and the views expressed here are solely his responsibility. He would also like to acknowledge the helpful comments received from G. E. J. Dennis on an earlier draft.

References

(note 1 in page 9) ‘The new Cambridge and monetarist criticisms of conventional economic policy-making’, National Institute Economic Review, no. 74, November 1975.

(note 1 in page 10) See, for example, D. Laidler, ‘Monetarism: an interpre tation and assessment’ and J. Tobin, ‘The monetarist counter- revolution today—an appraisal’, Economic Journal, March 1981. For a leading contribution on the non-monetarist position see Sir John Hicks, The crisis in Keynesian economics, chapter III, Blackwell, 1974.

(note 1 in page 13) It is a feeling which Professor Godley and the Cambridge Economic Policy Group may also be experiencing over their earlier medium-term predictions of British industry's share of domestic and export markets. At least qualitatively, these seem to have proved rather spectacularly right, but the balance-of-payments implications which would have given them much more prominence have been masked by the deeper recession in the United Kingdom than in the rest of the world, and by North Sea oil.