The impact of ‘stop‐go’ demand management policy on Britain's consumer durables industries, 1952–65

Scott, Peter; Walker, James

doi:10.1111/ehr.12470

Cited by 9 publications

(5 citation statements)

References 22 publications

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“…After the end of the war, the main issues were maintaining the stability of the pound in international currency markets, facilitating the government's debt rollover process, and increasing economic growth relative to other developed economies (Allen 2016; Scott and Walker 2017). From a financial perspective, quantity restrictions on credit were imposed in order to increase the available funds for public debt rollovers and reduce credit-driven import growth, which would hurt balance-of-payments equilibrium (Offer 2017).…”

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“…From a macroeconomic perspective, whenever growth and employment accelerated, prices and wages increased, leading to balance-of-payments deficits as retailers shifted their sales from foreign to domestic markets (Middleton 1989). According to Scott and Walker (2017), the tools to prevent foreign account imbalances were reducing expenditure and increasing taxes to curtail aggregate demand (stop phase). As the balance of payments returned to positive territory, domestic pressure for stronger growth and higher employment would increase, motivating a reduction in taxes and expanded government expenditure (go phase) (Middleton 1989, 2014).…”

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Stock market co-movement, domestic economic policy and the macroeconomic trilemma: the case of the UK (1922–2016)

Laverde

2019

Financial History Review

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This article explores the global cycle hypothesis by testing whether the US stock market serves as an explanatory variable for the evolution of expansions and contractions in the UK stock market from 1922 until 2016. Alternatively, it tests an index that groups the stock markets of advanced economies to identify whether this driving force is international. Second, regarding co-movement with the US, the article explores whether its time-varying nature is contingent on the domestic and international economic policy regimes. I find evidence that there is a strong and contemporaneous co-movement between the US and UK stock markets. Additionally, through a VAR model, I identify that the movements in the UK stock market cause, in the Granger sense, changes in the index for advanced economies up to two years later. Furthermore, in the short-run co-movement between the US and UK stock markets is contingent on the macroeconomic trilemma while, in the long run, both domestic and international policy regimes affect the relationship. A final contribution is the design of a new methodology for describing the evolution of financial time series as risk-adjusted above or below average returns to different time horizons: the Local Bull Bear Indicators (LBBIs).

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Stock market co-movement, domestic economic policy and the macroeconomic trilemma: the case of the UK (1922–2016)

Laverde

2019

Financial History Review

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“…445–6. However, while this argument was used to win round the Cabinet, it did not feature in the extensive volume of Treasury internal discussions reviewed for this article, nor do the Treasury papers show any support for easing restrictions on transport investment or the consumer durables industries (see, for example, Scott, ‘Public‐sector investment’; Scott and Walker, ‘Impact of “stop‐go”’) despite high forecasted rates of return on some projects.…”

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confidence: 99%

“…For a fuller discussion of the links between financial liberalization and stop‐go policy, see Scott and Walker, ‘Impact of “stop‐go”’.…”

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‘Stop‐go’ policy and the restriction of postwar British house‐building

Scott

Walker

2018

The Economic History Review

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From the mid-1950s to the early 1980s the Treasury and the Bank of England successfully advocated a policy of restricting both private and public sector housebuilding, as a key but covert instrument of their wider 'stop-go' macroeconomic policy framework. While the intensity of restrictions varied over the economic cycle, private house-building was restricted (through limiting mortgage availability) for almost all this period. This was achieved by keeping building society interest rates low relative to other interest rates and thus starving the building society movement of mortgage funds. Mortgage restriction was never publicly discussed and sometimes operated alongside ambitious housing targets and well-publicized policy initiatives to boost housing demand. This article outlines the evolution of house-building restriction, together with its impacts on the housing sector and the wider economy. We review the evolution of the policy framework and its consequences, compare the level and stability of British house-building during this period-historically and relative to other countries-and undertake time-series econometric analysis of its impacts on both house-building and house prices. Finally, implications for debates regarding stop-go policy, Britain's housing problem, and the distributional consequences of government macroeconomic policy are discussed.

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“…E.g.,Ball and Drake (1963),Stone (1964),El-Mokadem (1973),Garganas (1975),Cuthbertson (1980), and, recently, Aron, Duca, Muellbauer, Murata and Murphy (2012) andScott and Walker (2017).8 Other papers including Koch (2015) study individual credit policies in the US such as Regulation Q.…”

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Monetary Versus Macroprudential Policies: Causal Impacts of Interest Rates and Credit Controls in the Era of the UK Radcliffe Report

Aikman

Bush

Taylor

2016

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We have entered a world of conjoined monetary and macroprudential policies. But can they function smoothly in tandem, and with what effects? Since this policy cocktail has not been seen for decades, the empirical evidence is almost non-existent. We can only fix this shortcoming in a historical laboratory. The Radcliffe Report (1959), notoriously skeptical about the efficacy of monetary policy, embodied views which led the UK to a three-decade experiment of using credit controls alongside conventional changes in the central bank interest rate. These non-price tools are similar to policies now being considered or used by macroprudential policymakers. We describe these tools, document how they were used by the authorities, and craft a new, largely hand-collected dataset to help estimate their effects. We develop a novel identification strategy, which we term Factor-Augmented Local Projection (FALP), to investigate the subtly different impacts of both monetary and macroprudential policies. Monetary policy acted on output and inflation broadly in line with consensus views today, but credit controls had markedly different effects and acted primarily to modulate bank lending.JEL codes: E50, G18, N14.

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The impact of ‘stop‐go’ demand management policy on Britain's consumer durables industries, 1952–65

Cited by 9 publications

References 22 publications

Stock market co-movement, domestic economic policy and the macroeconomic trilemma: the case of the UK (1922–2016)

Stock market co-movement, domestic economic policy and the macroeconomic trilemma: the case of the UK (1922–2016)

‘Stop‐go’ policy and the restriction of postwar British house‐building

Monetary Versus Macroprudential Policies: Causal Impacts of Interest Rates and Credit Controls in the Era of the UK Radcliffe Report

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