DP386 | The Implications of British Macroeconomic Policy in the 1930s for Long Run Growth Performance

Publication Date


JEL Code(s)


Programme Area(s)



The paper provides a synthesis of recent research relating to supply side policy in the 1930s in a period when government sought to raise prices given sticky wages. We argue that as a politically constrained strategy to limit rises in unemployment this made sense. A bargaining model approach suggests, however, that this had a harmful impact on productivity growth by stifling competitive pressure and retarding rationalization of old industries.