ABSTRACT
As we approach the millennium, the state of the economy is as close as ever to the heart of political and economic debate with economic prospects the subject of much speculation. The longer-term growth of the UK economy, of around 2.5 per cent, has generally been less than that of other major capitalist economies over the post-war period. In the long term one of the fundamental aims of economic policy should be to raise this underlying rate of growth; understanding how this can be achieved is the main objective of this volume. However, more short-term considerations such as an over-heating economy and balance of payments crises have in the past diverted attention from this fundamental objective. The UK economy has long been subject to cyclical changes but the post-war period has seen a succession of severe cycles. The amplitude of economic cycles has increased recently, so that the apparent horrors of the 1950s and 1960s now look like mere hiccups rather than the economic shocks which bring down governments.
