The short-term regulation of the national economy

Abstract

I should like to begin with a brief historical perspective. Before the First World War there was little or no conscious attempt at short-term regulation of the national economy. The main objects of fiscal policy had nothing to do with demand management; they were to keep public expenditure as low as possible and to balance the Government’s budget. Nor was monetary policy concerned with regulation of the national economy but rather with ensuring the convertibility of paper money into gold at a fixed rate and with avoiding banking crises.

Paper given to a conference of the Foundation for Business Responsibilities, at the Festival Hall, London, June 1970 (published July 1972).