ABSTRACT
In theory, indeed, any decision of government which alters the availability or allocation of resources may be said to have an effect on the rate of growth. The sphere of government economic activity had thus been much expanded since the pre-war years. Rejecting the ‘inflationary’ remedies for depression, the government were left with deflationary ones. The domestic consequences of the return to gold were less pronounced than the external effects. The potential advantages to be gained from unbalancing the budget were thus ignored during the 1930s. The chief beneficiary of cheap money was not thought to be manufacturing, however, but house building. The large disparities in regional unemployment rates during the inter-war years have already been considered. To expect the government to enjoy unqualified success in ameliorating the condition of the economy is as chimerical as it is, say, to expect a police force to abolish crime.
