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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

This chapter begins with a brief general appraisal of the economic situation. The second section discusses output, income and the main items of expenditure and the third, the movement of employment and unemployment. A fourth section deals with the balance of payments, and in a concluding section there is a brief discussion of the implications of our forecasts for policy. The situation and prospects of the rest of the world are examined in Chapter II.

Type
Articles
Information
National Institute Economic Review , Volume 28 , May 1964 , pp. 4 - 15
Copyright
Copyright © 1964 National Institute of Economic and Social Research

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References

(1) This calculation derives from our own assessment of the pattern of stockbuilding in the second half of 1963, which is discussed on page 11.

(1) See table 11 of the Statistical Appendix for details.

(1) Cash savings are the difference between disposable income and cash payments. They exceed the official savings figures by the amount of the addition to consumers' credit.

(1) Board of Trade Journal, 27 March 1964, page 670.

(1) The change in productive potential is the change in output (arising from increases in productivity and the labour force) which would keep equilibrium unemployment stable.

(1) Assuming unrecorded net receipts of £50-75 million in the balancing item.

(2) Stockbuilding in excess of the ‘normal’ rate necessary to keep stocks rising in line with the long-term trend of output.

(3) See Hansard, 14th April 1964, Cols. 253-270 and Economic Review No. 27, February 1964, Chapter 1.

(4) The fact that the forecasts of demand are uncertain does not, in itself, mean that it is right to over-correct or under- correct when adjusting to the desired pressure of demand. The forecasts indicate the most likely course of events; the possible error is as great in one direction as the other.