ABSTRACT
The Brookings Report’s conclusions on demand management may be roughly summarized as follows:
There is no clear case for believing that the average level of demand in the British economy in the post-war period was either too high or too low.
The authorities did not make a very good job of stabilizing demand around this average. The resulting stop-go cycles had harmful effects, especially on investment.
The instruments used for demand management had undesirable side-effects. More use should have been made of fiscal measures and less of monetary measures.
These faults in demand management, however, were not the main reason for the poor productivity performance of the UK relative to other countries. The main reasons for this lie at the micro level, that is to say in more general inefficiencies pervading the economy.
