Major Recessions: Britain and the World, 1920-1995

Major Recessions: Britain and the World, 1920-1995

Major Recessions: Britain and the World, 1920-1995

Major Recessions: Britain and the World, 1920-1995


In the twentieth century there have been five major recessions: two in the interwar period, and three more starting 1973, 1979, and 1989. This book focuses on events in the UK, but sets them in their international context, and makes frequent comparisons with other countries. Major recessions happened at a similar time in all major countries, and the lessons are general. Three main conclusions are reached: (1) major recessions reflect abrupt fallings off in demand, not supply; (2) these are due to identifiable demand shocks and by swings in consumer and business confidence which amplify the direct effects of demand shock; (3) major recessions are not predictable. In the final chapter, Christopher Dow puts forward an insider's view on how to avoid future severe recessions: action must be taken to control booms, which if uncontrolled will lead to a period of bust, and once a major recession has begun, fiscal and monetary policy must be adjusted to mitigate the downturn. Often unpopular with economists, this is the line which many governments and central banks take: Major Recessions will help them to have more success.


This preface is intended mainly to express thanks for the many acts of assistance I have received while writing this book. Its production has occupied most of the ten years from 1988 to 1997. Together with A Critique of Monetary Policy-- written jointly with Iain Saville and planned as part of the same project--it has occupied the thirteen years since I retired from the Bank of England in 1984.

My debts are of four chief sorts.

I must thank first those who over the years read successive drafts of the book, so providing ears for words otherwise long unread: more especially Bryan Hopkin for repeated astringent criticism; also Andrew Britton, formerly Director of the National Institute. I similarly thank those who read individual chapters: Ian Little (Chapter 4), David Worswick (Chapter 6), Mervyn King (Chapters 6, 9 and 12), Alan Budd (Chapters 9 and 12), Douglas Wass (Chapter 12), William Keegan (Chapter 12), and Robert Neild (Chapter 12). I must equally thank those who undertook to read the book in draft: Robin Matthews (who read all), and Mike Artis and Frank Hahn (who read large parts). Despite their assistance, I am sure there remain many faults big and small. In the United States a work of this sort would probably have been funded on a scale many times larger. That might not have made the book many times better. But the increasing difficulty in raising money for research in the United Kingdom, and the necessity to search for ever smaller bites of support, must surely put this country at a disadvantage and undermine the quality of the work we can do. Things being what they are, long-continued work such as this would hardly have been possible but for the facts, first, that I was in receipt of a pension and retained an appetite for research; and second, that the National Institute of Economic and Social Research, by making me a Visiting Fellow, provided me with a base over this long period.

I thus owe a deep debt to the National Institute: to Andrew Britton and Martin Weale, successively its directors; and to Kit Jones, Hilary Steedman, and John Kirkland, in turn secretaries of the Institute. I have to thank Fran Robinson for her brick-like support; also Rita Charlton for repeated retyping, Claire Schofield, the librarian of the Institute, and many others of the support staff for help of many sorts.

Funding was required chiefly to provide statistical assistance on what worked out to be about a half-time basis. The array of charts and tables in the book makes evident what I owe to the three people who laboured in turn over the statistics: Mrs Hilkka Taimio (mostly Chapter 8); Pierre van der Eng (Chapters 3, 4, and 6); and Chao Dong Huang (Chapters 2, 5, and 7-12).

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.