ABSTRACT

Economic growth can be measured by the continuous tenure of office of political parties. Economic growth is measured in three ways: output, income and expenditure. Sir Alan Walters tried to justify excluding the recession in his American Enterprise Institute lecture: Mrs. Thatcher suffered from a singular handicap; she came into office in 1979 at the top of the boom. The Government began by erring on the side of pessimism about economic growth. The stabilization of growth is an important subsidiary objective for any government. It keeps the economy close to the growth of productive potential, without alternating phases of unemployment and inflation, although business cycles can never be entirely eliminated. The Government’s micro-economic policy for growth was directed towards the supply side and professed to be indifferent to the management of demand. The Government underestimated the growth of real demand in 1987 and 1988 and even the rather lower growth of real Gross Domestic Product.