Custom Search

Reddaway. 2 Examine: The movements in productivity under Thatcher's Government provide a major justification for her policies. 2. The rise in unemployment since 1979 largelyreflects the reduction of overmnning:hidden under-employment has been replaced by visiible unemployment.

You need to produce counterfactual figures. What would have happened if Thatcher were not in power.

Almost every year the is a rise in GDP. since 1948 it has trebled. Over 4 years there is a substantial rise in GDP.

We are interested in the average of Tha tcher compared to the average otherwise.

1.      Past trend

Before thatcher things rose a lot quicker. We want to take a fairly long period. From peak to peak is a scientific way to compare things. But from 73-79 is a cheating, as 73 was exceptional. So he takes 60 and 79, because these years were similar and period is longer.

How we calculate the counterfactuals.

We calculate the par - average growth for 10 years (compound). Actual output is slightly lower thaan par (-2.2%), output per head was substantially below par. Manufacturing is very different compared with the whole economy. But if we would have produced figgures without manufacturing for the whole economy they would have been even worse. So if we are discussing about deindustrialisation, we mean that the employment is going down, not output. So answer for the first question is - rubbish.

The essence of the second question we need to look at the whole economy, we see that the unemployment is falling. When they change the figgure they draw a line in the statistic book, so figuresare uncompabare. Still the unemployment was rising. But the productivity is rising and married women and eldery get to work. OK, is it good or bad. But unemployment has risen, so it was not good.

2.      Consider whether there were exceptional factor, that could make the average bigger or lower.

North sea oil. Welfare. Inflation. Balance of payments.

Click here to see more economics,politics and school papers from me