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The Economic Situation: Chapter I. The Home Economy

Published online by Cambridge University Press:  26 March 2020

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Extract

In our view, the effect of the July measures will not be such as to produce an actual recession-a drop in national output-in 1967. The forecast at the centre of probability is still for a fractional rise in total output ; this would be consonant with a small fall in industrial production. There are still some expansionary forces in the economy-exports (for we expect no great slowing down in the rise in world trade) and public sector expenditure generally : public authorities' current expenditure, public sector housing and other public investment programmes. These will probably be strong enough to balance a decline in private investment (including private housing). Our tentative forecast is that manufacturing investment will be 6 per cent lower in 1967 than in 1966 ; this is a smaller fall than in 1962 or 1963. But, although the size of the fall is central to the discussion of the possible long-term growth rate, it is not a key element in the short-term forecast, since manufacturing investment is less than a quarter of total investment. Even if it were to fall as fast as in 1962, this would not substantially alter the prospect for national output in the year 1967.

Type
Other
Information
National Institute Economic Review , Volume 37 , August 1966 , pp. 4 - 19
Copyright
Copyright © 1966 National Institute of Economic and Social Research

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References

note (1) page 4 Including a ‘normal’ balancing item.

note (1) page 6 National Institute Economic Review No. 36, May 1966, page 4.

note (2) page 6 National Institute Economic Review No. 36, May 1966, table 2, page 7. This includes a ‘normal’ balancing item.

note (3) page 6 Including a ‘normal’ balancing item.

note (4) page 6 According to estimates in the Bank of England Quarterly Bulletin.

note (5) page 6 It is assumed that half personal and professional bank advances are used for the purchase of consumer goods.

note (1) page 8 West Germany, £89 million; Far East, £95 million; Middle East, £28 million; Mediterranean, £38 million; other local, £31 million; and HQ (contributions to International Programmes, etc.), £19 million.

note (1) page 10 Including a ‘normal’ balancing item.

note (1) page 11 National Institute Economic Review No. 33 August 1965, page 18.

note (1) page 12 Statistical Appendix table 11.

note (1) page 14 Statistical Appendix table 17.

note (1) page 15 This is the figure, shown in table 9, obtained by dividing the total wage and salary bill by the figure for employment.