Convergence, divergence and realignment in British macroeconomics

Abstract

In this paper the author argues that the still frequent and simplistic distinction between Keynesians and monetarists that makes up a large part of the British popular economic debate has become seriously misleading. Changes that have taken place in British macroeconomics since the early 1970s are thus indicated and some of the theoretical and empirical factors responsible for these changes are suggested. The author presents a brief characterisation of British Keynesianism and monetarism as of late 1960s/early 1970s, arguing that there have been important elements of convergence. He proceeds to discuss some of the theoretical developments and some of the experiences of UK macroeconomic policy which have contributed to this convergence. Finally, he considers whether the labels “Keynesian” and “monetarist” continue to be relevant.