Deindustrialisation and Economic Growth

Author(s): Nicholas Crafts

Source: The Economic Journal, Vol. 106, No. 434 (Jan., 1996), pp. 172-183
Published by: Wiley on behalf of the Royal Economic Society
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The Economic Journal, io6 (January), 172-183. ? Royal Economic Society I996. Published by Blackwell
Publishers, io8 Cowley Road, Oxford OX4 iJF, UK and 238 Main Street, Cambridge, MA 02I42, USA.

DEINDUSTRIALISATION AND ECONOMIC

GROWTH

Nicholas Crafts

There can be no doubt that during the postwar period Britain has experienced
a relative economic decline reflected in inferior growth and productivity
performance. This was particularly pronounced during the 1950S to 1970S and
was especially characteristic of the manufacturing sector. During the i980s
supply-side policy changed dramatically, a more optimistic assessment of
comparative performance became possible, and at last it seemed reasonable at
least to pose the question 'has relative economic decline been reversed?'
While few would deny that there were during the I98os signs of at least a
transitory improvement in many performance indicators, there were wide-
spread fears that the long-run implications of the policy switch were much less
favourable and might even be seriously damaging. Much of this dismay centred
on the rapid deindustrialisation which had occurred and was expressed most
eloquently in a House of Lords Select Committee Report: 'Manufacturing
industry is vital to the prosperity of the United Kingdom ... Our manufacturing
base is dangerously small; to achieve adequate growth from such a small base
will be difficult' and 'The present lack of Government commitment, support
and assistance to industry are damaging to our national interest' (House of
Lords, I 99 I, p. 3, 43) .
Recent work in both theoretical and applied growth economics allows a
better understanding of what went wrong through the I97os and the
implications of what happened in the I98os. After a brief review of some key
ideas, the paper assesses growth and productivity outcomes before and after
I979 and suggests that a mixed verdict on the Thatcher Experiment is
appropriate. Industrial relations reforms increased productivity growth but
there was less immediate success in improving the skills of the workforce or
patenting performance. Against this background, further change may well be
desirable but dire predictions about the consequences of deindustrialisation
seem grossly exaggerated.

I. KEY IDEAS FROM GROWTH ECONOMICS

In exploring the United Kingdom's growth performance we can take

advantage of insights from recent research. First, new models of growth hav
tended to reassert the importance of investment and have, in effect, propos
various ways of endogenising technological progress and total factor pro-
ductivity (TFP) growth (van de Klundert and Smulders, I 992). Secondly,
broad capital is now seen as being at the heart of the growth process with a
strong emphasis on the roles of human capital formation and research and
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 [JAN. I996] DEINDUSTRIALISATION AND ECONOMIC GROWTH I73

development. Thirdly, investment decisions must be thought of in terms of

optimisation; a wide range of institutional arrangements and policy decisions
influencing the ability to appropriate quasi-rents will affect broad capital
accumulation and thus growth outcomes (Romer, I994). Fourth, comparative
growth performance across countries may be influenced by the catching up of
leading countries by followers as disincentives/obstacles to technology transfer
are removed in a world where social capability for catch-up matters
(Abramovitz, I 986). Fifth, in catching-up or keeping up with leading countries
an emphasis on bridging idea gaps (assimilating technology) may be more
important than concentrating on object gaps (routine investment) (Romer,
I993) .
An important feature of this work is that, at the very least, diminishing
returns to investment tend to set in much more slowly while in many models
diminishing returns are not present and growth is taken to be fully endogenous.
This implies that changes in broad capital accumulation may have effects on
rates of growth rather than just levels of income, as in the Solow model. Finally,
the best way to think about the central thrust of new growth economics is to
see it as endogenising innovation rather than abolishing TFP growth as an
important source of growth.'

II. RELATIVE ECONOMIC DECLINE IN THE I960S AND I970S

The basic outline of comparative economic growth p

is well-known. The United Kingdom fell from second in real income per person
in Europe in I950 to tenth by I979 (Maddison, I992). The overtaking of
British manufacturing productivity by other European countries has been
carefully documented by van Ark (I993) whose estimates are shown in the
statistical note. The United Kingdom's share of world manufacturing trade fell
from 209 % in I937 to I6-5 % in I960 and 9 I % in I979 (Crafts, I993a, p. 20).
All conventional growth accounting models show that a large contribution
to relatively weak British growth performance came from TFP growth and that
this remains true even after allowance is made for differential scope for catchup
(Maddison, 199I). The most careful study of TFP growth for British
manufacturing (using the gross output method) shows an average rate of
I-I6% per year for I958-73 falling to -I-25% for I973-9 (Oulton and
O'Mahony, I994, p. 9I). A cruder but still useful study estimated TFP growth
in British manufacturing at I *5 % per year between I 954 and I 972 while for
West Germany the rate was 2-6% (Panic, I976, p. 63). Some summary
comparisons for different periods are presented in Table I.
In seeking to account for the United Kingdom's relatively slow overall
1 Traditional growth accounting seeks to measure the contribution to growth from the accumulation
factors of production. Growth which cannot be accpunted for in this way - Solow's residual - is attribute
to improvements in total factor productivity (TFP growth) which may come from more efficient use of factor
of production and/or from technological change. One branch of new growth theory suggests that the
adoption of a broader concept of capital and better measurement of its contribution to growth will tend to
reduce or even eliminate any separate role for TFP growth. As Romer (I994) stresses, more persuasive new
growth theories seek instead to explain TFP growth through models which incorporate profit-motivated
innovation. On the subtleties of measurement of TFP growth, see Oulton and O'Mahony (I994).

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 I74 THE ECONOMIC JOURNAL [JANUARY

Table I
Productivity Growth Compared. (0o per year)

United European
Kingdom Median W. Germany

1960-73
GDP/Head 2-6 3-6 3-4
TFP in business sector 2-3 3-0 2.5
Manufacturing labour 50 - 6'i
productivity
I973-9
GDP/head 1-5 2'0 2'5
TFP in business sector o-6 I'4 i'8
Manufacturing labour 0'7 - 34
productivity
I979-89
GDP/Head 2'I I*9 I.7
TFP in Business Sector I'5 1-2 o'8
Manufacturing labour 4.2 2.3
productivity

Sources: Maddison (i99i), OECD (i99i a) and O'Mahony and Wagner (I994); European median refers
to the I2 European countries in Maddison's (I99I) database.

growth in the pre-I979 period it is clear that the quantity of physical

investment is only part of the story. Attention of growth economists has recently
centred on investment in machinery and equipment (De Long and Summers,
I99I) where the United Kingdom was never far below the European median
ahd during the I 970S matched this at a share of 8-8 % of GDP (OECD, I 99 I
At least equally important seem to be weaknesses in other aspects of broad
capital accumulation, namely in R & D and skills growth (Bean and Crafts,
I995). Moreover, econometric evidence suggests very strongly that these types
of investment may have positive externalities whereas physical investment does
not (Oulton and O'Mahony, I994; O'Mahony, I-992).
The British share of patents granted in the United States fell from 2
I958 to Io08% in I979 compared with a German decline from 25-6% to
22'7 % and ajapanese increase from 19 % to 27-8 % in the same period (Pavitt
and Soete, I982). In I979 23% of the British workforce had intermediate
qualifications compared with 6I1% in West Germany (Steedman, I990).
Econometric analysis demonstrates that British failings in each of these areas
were important reasons for declining export market shares in the long run
(Greenhalgh, I990; Oulton, I993). Investment in achieving technology
transfer was a crucial aspect of European catching-up in the I960s but an area
where Britain was relatively unsuccessful (Verspagen, I995).
A growth accounting analysis of comparative productivity levels in German
and British manufacturing in I979, reported in Table 2, shows broad capital
stocks and TFP levels roughly equally responsible for the German lead. This
analysis does not allow for externalities and its authors suggest that it somewhat
overstates the contribution of TFP and understates those of human capital and
R&D.

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 I996] DEINDUSTRIALISATION AND ECONOMIC GROWTH I 75

Table 2
Accounting for Relative Manufacturing Productivity Levels

Relative
German Relative Percentage point contribution
output per German
person hour TFP Physical Human
(UK = ioo) (UK = ioo) capital capital R&D

I979 140-0 II7-7 12-4 4*4 1-4

I989 I I6-5 Io056 6-o 3 3 o-8

Source: O'Mahony and Wagner (1994, tables 3, I8, I9).

As for differences in TFP levels and growth not properly attributable to

aspects of broad capital formation, it seems clear from the historical literature
that these very largely come from excessive employment (low effort levels) in
British manufacturing and are a further aspect of less successful catch-up in
Britain than in other European countries. This inefficient use of labour is
documented at length in Pratten and Atkinson (I976) and Prais (I98I), who
found that difficulties over manning levels reduced productivity improvements
from introducing new technology.
Obviously, explaining the persistence over time of such disappointing
performance is complex but three hypotheses offer plausible proximate
explanations of at least part of the problem. First, institutional factors and
policy choices may have undermined the incentive to invest. Tanzi (I969, pp.
I23-6) concluded that high marginal tax rates implied that the British income
tax system was the least conducive to investment and growth in any of the
OECD countries that he studied. Mayer (I992) has argued that the prevalence
of hostile takeover in the United Kingdom meant that large firms felt
compelled to maintain dividends and forego investment opportunities in R &
D and training unlike other European firms. Soskice (1 989) has suggested that
a dense set of interlocking institutional arrangements involving government,
employers and unions and financial institutions much enhanced the relative
attractiveness of long-term investments in Germany by largely eliminating
appropriability problems.2
Secondly, pressures to use resources efficiently were often quite weak. This is
generally seen as a period of rising product market power (Cowling, I 982) and
one where takeover was an ineffective discipline on managers of firms (Singh,
I975). In the relatively large nationalised sector inadequate monitoring and
control mechanisms led to excessive investment, inadequate restraint on
construction costs and underemployment of labour (Vickers and Yarrow,
I 988).
Thirdly, supply-side policies were badly targetted and often fundamentally
2 The incentive to invest depends upon the decision-maker's ability to profit from the pay-off, i.e. t
appropriate the returns. Returns from training of workers may be vulnerable to poaching by other employe
while, in the event of hostile takeover, top management may not survive to benefit from long-term R &
These are examples of appropriability problems which Soskice (I989) plausibly argues are less serious in
Germany than in Britain.

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 I 76 THE ECONOMIC JOURNAL [JANUARY

misconceived (Crafts, I99I). At bottom, governments sought particularly to

subsidise physical investment, to promote mergers and to favour manu-
facturing, eventually to the extent of selective interventions seeking to 'pick
winners'. Human capital formation was generally relatively neglected and
industrial policy was ineffective.
At the centre of many of these problems lay the traditional system of
industrial relations based on multiple unionism, whose reform effectively
required government action and could not readily be achieved by individual
private agents. Failing to grasp this nettle not only had direct effects on
investment, innovation and labour use but also imposed limits on other supply-
side reforms. British governments, however, tended to find that addressing this
problem was not consistent with the premium that they placed on winning
votes through pursuit of short-term macroeconomic goals of low inflation and
low unemployment. This was most obvious during the Social Contract of the
mid-I970s; nevertheless, the problem was in evidence from the immediate
postwar years (Crafts, I 993 b).
Recent research has confirmed the potential importance of industrial
relations to growth during the I96os and I970S. Long-run growth effects can be
expected following the work of Grout (I984) who showed that bargaining
between management and workers can lead to under-investment in the absence
of binding contracts, because ex-post the workforce are able to extract part of
the return that would otherwise accrue to capital. In Bean and Crafts (I 995),
this insight is developed in an endogenous innovation type new growth model
to predict that total factor productivity growth will be reduced particularly in
the face of multi-unionism. Their econometric results are that in British
manufacturing during I 954-79 the presence of multiple unions depressed TFP
growth by around o 75 to I percentage points per year.

III. POLICY AND PERFORMANCE IN THE I980S

The Conservative government elected in I979 sought an escape from the

disappointments of the I970S through institutional reform on the micro-
economic front and in macroeconomic policy initially through an evolving
essay at monetarism. Deregulation, privatisation and reductions both in direct
taxation and in trade union power were seen as highly desirable while
government action to correct market failures was regarded with suspicion.
Fortuitous political circumstances gave a radical British Prime Minister an
extended window of opportunity for fundamental economic policy change. The
government saw itself as seeking to escape from the trade unions' veto on
economic reform (Holmes, I985).
Given this stance, it is perhaps not surprising that the obstacles to faster
growth identified above were addressed in a rather uneven fashion. Broadly
speaking, the government was effective in dealing with the important industrial
relations problem but British weaknesses in human capital formation and
technological capability seem to have continued. Moreover, while productivity
performance undoubtedly improved, failures in the design and implementation

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 I996] DEINDUSTRIALISATION AND ECONOMIC GROWTH I77

of labour market reforms, welfare and macroeconomic policies implied that

outcomes with regard to unemployment, income distribution and economic
well-being were most unfortunate (Crafts, I993c).
Tables I and 2 provide a prima facie case for improved productivity
performance. Bearing in mind reduced scope for catch-up and making an
allowance for additional leisure growth, the UK performance in growth of
measurable economic welfare during I979-89 was quite respectable if no
account is taken of changes in income distribution (Crafts, I993c). The
manufacturing labour productivity gap with Europe was cut substantially.
Oulton and O'Mahony find that after I982 there was a substantial and
statistically significant change in the growth of TFP in British manufacturing
which rose to o-82 % per year (I 994, pp. 9I, II7).
There certainly have been important developments in industrial relations
where initially conduct and eventually structures were 'transformed'. During
the i 980s management prerogatives were restored, bargaining is now at the
company rather than the workplace or the industry level, union membership
haemorrhaged and the closed shop is almost extinct (Metcalf, I994). In terms
of unemployment and competitive pressures the environment became less
favourable to the exercise of union power and to low effort equilibria. This was
clearly associated with at least once and for all improvements in labour
productivity as a whole host of econometric studies show (Bean and Symons,
I 989; Gregg et al., I 993; Haskel, I 99 I ; Machin and Wadhwani, I 99 I a, b;
Nickell et al., I992). Moreover, negative effects of union recognition on
investment (Denny and Nickell, I992) and of multiple unionism on TFP
growth (Bean and Crafts, I995) are found to be much reduced and to
disappear respectively.
It appears that in the I980s the United Kingdom performed a somewhat
belated catching-up exercise; this seems to confirm the diagnosis that slow
growth in the I96os and I970S owed a good deal to inefficiency of factor usage.
Obviously, job-shedding in manufacturing tended to raise broad capital per
worker for the remaining labour force but O'Mahony and Wagner (I 994, p. 8,
24-5) show on a growth accounting basis that about half the improvement in
labour productivity in British relative to German manufacturing came through
changes in TFP and they also note that regressions at the sectoral level suggest
a doubling of the speed of catch-up of its German counterpart by the average
British industry in I979-89 compared with I960-73. In fact, in a regression
analysis of productivity differences, O'Mahony (1 992) finds that by I987 TFP
in British manufacturing may actually have exceeded that in West Germany
and the most important German advantage may have been in human capital,
which is estimated to account for I 3-4 percentage points of a 22-2 percentage
point German lead.3

3 These results differ from those in Table 2 because they are estimated rather than obtained by imposing
weights based on factor shares. O'Mahony's estimates imply that there were positive externalities to human
capital. Allowing for this, raises the contribution of human capital in accounting for the British labour
productivity shortfall and generates the implication that TFP in Germany was lower than in the United
Kingdom.

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 178 THE ECONOMIC JOURNAL [JANUARY

Indeed, British weaknesses in technology and capital accumulation, both

physical and human, continued through the I980s. The immediate route to
faster growth and higher manufacturing productivity was not apparently the
one prescribed by new growth economics, as the data on investment, R & D,
patenting and vocational training show, but some favourable long-term
changes may have taken place.
Manufacturing investment only regained the I979 level in I988 and was no
higher as a share of output in the peak year of I989 than in I979. By the end
of the decade, however, calculations of the corporate and income tax wedges
show that the United Kingdom was relatively similar to its European rivals and
below Japan or the United States (OECD, i99id, p. io6). Although the
volume of investment stagnated, the composition is likely to have improved
significantly as the fraction of industrial investment carried out by nationalised
concerns fell from 376 % in I98I to 5 6% in I99I while foreign direct
investment accounted for 335 % of private capital expenditure in manu-
facturing in I99I compared with 255 0% in I98I. In particular, this might be
expected to have improved British access to foreign technology and reduced
waste.
A late I98os assessment of technological capabilities concluded that the
United Kingdom remained a weak performer (Patel and Pavitt, I988),
spending on R & D by British industry was i6 % of output compared with
2 2 % in Germany and 2-I % in Japan (Stoneman, I99I) and the UK share of
patents in the United States fell further to 8- I % in I988 (OECD, I99I c).
As far as education and skills are concerned, by the end of the I980s the
figures showed a somewhat more mixed picture as, rather belatedly, reforms to
Vocational training and schooling were introduced from I986 on. By I988 26 %
of the labour force had intermediate qualifications (Steedman, I990). In
manufacturing net job losses of 2 million were entirely among the unskilled so
that by I989 the proportion with no qualifications had fallen to 56 8 % from
7I 0o% in I979 but absolute numbers of skilled workers employed were sta
(O'Mahony and Wagner, I 994, p. I5). The Labour Force Survey showed a rise
in the proportion of employees receiving job-related training from 8-2 % in
I984 to I5.4 % in I990 and by I993 32 % of i8 year olds went into higher
education compared with I2 % in I98I (Robinson, I994).
Critics remain fiercely critical of the quality of what is being delivered and
the standards being attained (for example, Layard et al. I994) and it remains
to be seen whether during the I99OS evidence of a positive impact on
productivity performance will be seen. At present it is quite unclear what has
been achieved in terms of human capital formation.
Overall, the implication of this review is that the policy reforms of the I980s,
while imperfect and leading to disturbing outcomes in other respects, probably
raised rather than lowered the long run growth potential of both the economy
overall and manufacturing compared with a counterfactual of trying to
continue with the (ultimately unsustainable) policies of the I970S. This is not
to deny that a significant part of I980s manufacturing productivity growth
came from once and for all improvements nor that worries about the adequacy

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 I996] DEINDUSTRIALISATION AND ECONOMIC GROWTH I 79

of long-term investment continued. Nevertheless, i

endogenous innovation, investment and long run gro
of returns, then industrial relations and tax reform

IV. DEINDUSTRIALISATION: DISTRACTION OR DISASTER?

For those who doubt the preceding message, a major reaso

despite the improvement in manufacturing productivity d
period was one in which manufacturing output grew very
the labour force in industry fell from 42 6 % in I 973 to 29
balance of trade in manufactures turned negative for the f
deficit of 3-6% of GDP in I989 (Crafts, I993a, p. 2I, 23
The idea of a balance of payments constraint on growth
or deployed to promote damaging supply-side policies. Nevertheless, pro-
ductivity performance and supply capabilities in manufactures or more strictly
in tradables clearly have an added effect on real incomes insofar as they affect
the terms of international trade. Church (I992) suggested that there might be
a need to reduce the real exchange rate during the I99OS and his estimates
might indicate at worst an impact of around 04 0% per year on future real
income growth. The more damaging claim that rigidity of the real exchange
rate compels permanent deflation and thus constrains growth far below
productive potential is, however, empirically quite unpersuasive (Crafts,
I993a, pp. 25-6).

There is clear evidence that greater accumulation of human capital and

innovative activity at the sectoral level would have had positive implications
for net exports and in the late I980s UK weaknesses were still evident
(Greenhalgh, I990; Oulton, I993). Nevertheless, the balance of payments
position is not a good guide to the appropriateness of supply-side policy but
rather a reflection of macroeconomic management. Here spectacular mistakes
were undoubtedly made during the late I980s leading to a dramatic surge in
investment relative to savings (Crafts, I994).
Present trends and forecasts suggest that, given an appropriate rebalancing
of macroeconomic policy and thus consumption relative to exports growth,
there is no reason to see the balance of payments as a reason even for short-term
demand growth to be restrained. For example, the November I994 NIESR
forecast is for the current account deficit to average 0 7 % of GDP during
I 994-7 and for exports and manufacturing output growth to average 6-5 % and
4-0 % per year respectively.
A more serious version of the deindustrialisation worry is provoked by
returning to new growth theory. Here the arguments come from the Krugman-
Lucas model (Krugman, I987; Lucas, I988) which addresses the dynamic
effects of specialisation in international trade.4 This highlights the possibility
4 Productivity growth through learning by doing is the key to the Krugman-Lucas model. This tends both
to amplify initial comparative advantages and disadvantages and, because rates of learning differ across
sectors, to sustain differences in growth rates depending on trade specialisation. In this kind of model,
exchange rate shocks may have permanent effects on the composition of output and thus the rate of growth.
For a simple diagrammatic treatment, see Crafts (I 993 a).

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 I8o THE ECONOMIC JOURNAL [JANUARY

that learning effects lock in initial positions and/or make errors in

macroeconomic policy potentially damaging in the long-run because flexible
re-adjustment of the composition of output is precluded. If specialisation turns
out to be in activities with relatively low scope for productivity growth, then
relative economic decline is the outcome. Here might be found a serious
intellectual foundation for the 'House of Lords View', some justification for
infant industry policies and reasons to regret the exchange rate implications of
early I98os monetarism and the entry into ERM at DM 2.95.
It is hard, however, really to believe in the apparent warning of the
Krugman-Lucas model as applied to deindustrialisation in contemporary
Britain. Partly, this is because the apparent British level of industrialisation is
not hugely out of line with other OECD countries and may be understated
relative, say, to Germany where more services are sourced from inside
manufacturing firms and maintenance is treated differently in the sectoral
accounts (van Ark, I995). Had Britain deindustrialised at the average OECD
rate and the services/manufacturing sectoral productivity growth remained
the same, an arithmetic calculation shows that over I973-89 this would have
raised UK overall labour productivity growth by only o I 5 ? per year (Crafts,
I993 a, p. 62).
There are also two more important reasons for scepticism of strong
Krugman-Lucas effects. First, the empirical evidence for British manufacturing
in the recent past does not support the hypotheses of externalities to physical
investment, increasing returns to scale or strong and pervasive learning effects
(Oulton and O'Mahony, I994). Secondly, the empirical evidence does suggest
thqt international spillover effects of R & D on productivity growth, transm
in a large part by foreign investment, are very substantial (Coe and Helpman,
I 993). The revitalisation of the car industry in Britain under joint alliances and
foreign ownership seems to epitomise this point.
Deindustrialisation during the I98os should not then be regarded as a
disaster for future growth prospects, although it is a potential distraction, as
some of the hysterical comment of recent years suggests. In the hands of
populist politicians, seeking to respond to deindustrialisation carries with it
much the same dangers identified by Krugman (I994) in the pursuit of so-
called national competitiveness initiatives. Misunderstanding of the signals
from the balance of payments, exaggeration of the importance of trade to
living standards and reversion towards the unsuccessful (protectionist)
industrial policy interventions- of the I960s and I970S are all to be feared.
Deindustrialisation could even become, in Krugman's striking phrase, a
'dangerous obsession'.

V. CONCLUDING COMMENTS

Both policy choices and outcomes since I 979 need to be seen against the context
of and the constraints imposed by the situation which had been allowed to
develop through the previous thirty-five years. Reversing relative economic
decline clearly implied addressing the productivity gap in manufacturing and
a return to the prospects and policies of the I970S would be a desperate fate.

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 I996] DEINDUSTRIALISATION AND ECONOMIC GROWTH i8i

Deindustrialisation of the labour force was an inherent part of a process of

raising the growth rate by improving the appropriability of returns to
innovation and liberalising the economy. Better design of macroeconomic and
labour market policies could and should have made this process less painful.
Regarding the reversal of deindustrialisation as per se good for growth and
long-term economic welfare and setting policy accordingly would be a serious
error.
No one can yet be sure what will be the effects of the Thatcher and Major
governments on the long-term growth rate. There remain large question marks
over the human capital formation and technological capabilities of British
industry and there may be market failures in this area which require some
reconsideration. If so, policy should address these directly rather than focussing
on physical investment and the balance of payments as in interventionist days
gone by.
Those wishing to further the process of catch-up by the industrial sector in
Britain should, in the terminology of Romer (I 994), pay attention to the 'ideas
gap'. Emphasis should be placed on ensuring that knowledge available from
abroad will be used effectively and speedily rather than on promoting high
rates of physical investment or formal education to reduce the 'objects gap' per
se. More may yet need to be done but the supply-side reforms of the recent past
and, linked to these, an increased presence of multinational companies in
Britain are surely steps in the right direction.

London School of Economics

REFERENCES

Abramovitz, M. (I986). 'Catching up, forging ahead, and falling behind.' Journal of Economic History, vol.
46 (June), pp. 385-406.
Bean, C. and Crafts, N. F. R. (I 995) . 'British economic growth since I 945: relative economic decline ... a
renaissance?' CEPR Discussion Paper No. I092.
Bean, C. and Symons, J. (I989). 'Ten years of Mrs T.' NBER Macroeconomics Annual, vol. 3, pp. I3-6I.
Church, K. (I992). 'Properties of the fundamental equilibrium exchange rate in models of the UK
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