Commentary
Abstract
Commentary SAGE Publications, Inc.1994DOI: 10.1177/002795019415000101 The UK economy Improvements in economic performance The continuing recovery of output growth in the ~JI~ economy this year has been associated with some unexpected developments which, taken together, may indicate changes in underlying behaviour. The rate of increase in wages and prices has remained low despite the 1992 devaluation of sterling and despite indications of increased capacity use in manufacturing. The balance of payments has improved, despite the recovery in domestic demand. Consumer spending continues to rise despite the tax increases in the two Budgets of 1993. And unemployment continues to fall. There is a phase in most economic cycles when all the news appears to be encouraging and commentators begin to talk of 'economic miracle'. Notoriously this was the case in the mid-1980s when a run of years of sustained growth was widely attributed to policy-induced 'supply- side improvements'. Our own analysis at the time, although imperfect and incomplete, was at least right in questioning the durability of the growth rates observed. The recession which followed, in the ~~~r~t~ seemed to show that the macroeconomic behaviour of the UK economy remained problematic despite the well-documented microeconomic improvements in many sectors, It