Assess the period of 1952-1963
The period of 1952-1963 was in the heart of what is known as ?the golden age', which saw wide scale growth of GDP and investment in Western Europe. The distinguishing features of the post war period as identified by Matthews was of full employment, chronically rising prices, an abnormal ratio of domestic investment to income and relatively high growth in income per capita by historical standards. In this epoch of British history government policy principally tried to manage the level of inflation, the balance of payments, the level of investment, the rate of growth and the level of employment. The tools available to the government can broadly be divided into two categories manipulating the level of fiscal expenditure in the economy as well as influencing the level of monetary supply in the economy.
Fiscal policies largely revolved around changing the levels of government taxation and expenditure, to expand or contract the economy. The government would purposely run a surplus, where revenue from taxation would be higher than expenditure on public goods and services, in order to calm down the economy and reduce inflation. Oppositely the government could run deficits or run down the level of the surplus to fulfil an expansionary policy in order to boost the level of demand in the economy though this could be inflationary. The idea of manipulating the direction of the economy through the level of spending is a traditional Keynesian school of thought which predominated economic thinking in this period.
Monetary policy involved the manipulation of the level of money supply in the economy with instruments such as banking credit controls, creating ceilings on lending, and manipulating the bank interest rate. In t ...