bluuebunny/crossref_metadata_2025 huggingface dataset:
Towards a New Agenda for Work and Personality: Traits, Self‐identity, “Strong” Interactionism, and Change Guest Editor's Introduction
Authors: Nicholson Nigel
Published: January 2008

Les mesures et les concepts relatifs à la personnalité suscitent un regain d'intérêt. Cet article passe en revue quelques thèmes actuels de première importance et ouvre de nouveaux horizons pour les théories et les recherches, en s'attachant en particulier à leur pertinence pour la psychologie du travail. Historiquement, trois thèmes ont été développés dans ce domaine: la recherche d'universaux prétendant décrire et prédire la personnalité, la recherche de la perfectibilitéà travers les concepts d'apprentissage et de changement, et la recherche de Solutions intéractionnistes ménageant un compromis entre ces orientations. Toutefois, plus d'un soit‐disant intéractionnisme semble bâti sur un terrain mouvant, et Ton ressent le besoin d'un nouvel intéractionnisme “fort” qui reconnaisse d'une part la puissance et la relative stabilité des structures profondes de la personnalité et d'autre part l'importance des contraintes de Situation, on peut reformuler ces relations avec une meilleure identification des différents statuts et fonctions des concepts de personnalité et d'identité. Ceci conduit également à de nouvelles façons de penser les notions clés de l'adaptation personne‐environnement, par exemple les significations envisageables des types de personnalité“déterminants”‐“non determinants” ou encore les differences interindividuelles dans la propension au changement ou à la stabilité de la personnalité.

Personality concepts and measurements are showing a sustained revival of interest, and this paper aims to review some major current themes, as well as suggesting new directions for theory and research, considering in particular their relevance for work psychology. Historically the field has developed along three themes: the search for universals in personality description and prediction; the search for perfectibility through concepts of learning and change; and the search for interactionist alternatives to steer a course between these positions. However, much so‐called interactionism seems to occupy shifting ground, and a need for new “strong” interactionism is argued, which recognises the relative immutability and power of deep personality structures, as well as the importance of situational constraint. One way of reconceptualising these relationships is by a clearer recognition of the different status and functioning of personality and self‐identity constructs. This also leads to some new ways of thinking about the key issues of person‐environment fit, such as the possible significance of “determinant” vs. “indeterminant” personality types, and about individual differences in propensity for stability and change in personality.
Configural Frequency Analysis in Applied Psychological Research
Authors: von Eye Alexander , Spiel Christiane , Wood Phillip K.
Published: January 2008

L'Analyse de Fréquence des Configurations (AFC) est une méthode de recherche des classes et anticlasses dans les classifications croisées de catégories de variables. Les classes sont des modèles de catégories de variables qui apparaissent plus souvent que le hasard ne le laisse supposes. Les anticlasses sont des modèles de catégorie de variables qui apparaissent moins souvent que le hasard ne le laisse supposes. On présente quatre applications d'AFC: l'AFC de premier ordre, l'AFC prédictive, l'AFC de symétrie axiale, et un modèle d'AFC longitudinale. On examine les caractéristiques de l'AFC en insistant sur les contraintes et l'applicabilité. On compare aussi l'AFC avec d'autres méthodes permettant l'analyse multivariée de catégories de données, en particulier la modèlisation log‐linéaire. Des sorties informatiques sont traitées.

Configural Frequency Analysis (CFA) is a method for the search for types and antitypes in cross‐classifications of categorical variables. Types are patterns of variable categories that occur more often than expected from chance. Antitypes are patterns of variable categories that occur less often than expected from chance. Four applications of CFA are reviewed: the First Order CFA, the Prediction CFA, Axial Symmetry CFA, and one model of Longitudinal CFA. Characteristics of CFA are discussed, focusing on constraints posed and applicability. Comparisons are made of CFA with other methods for multivariate analysis of categorical data, in particular, log‐linear modelling. Computational issues are discussed.
Le changement des attitudes à l'endroit des femmes cadres: modèles différentiels en fonction du sexe
Authors: Rinfret Natalie , Lortie‐Lussier Monique
Published: January 2008

Une hypothèse avancée par Kanter (1977) veut que les femmes cadres des grandes entreprises feraient l'objet d'attitudes plus favorables si leur nombre augmentait jusqu'à atteindre la masse critique, soit 35% de l'effectif cadre. L'hypothèse a été en partie appuyée par une étude menée auprès de 354 cadres de la fonction publique du Canada, appelés à exprimer leurs opinions en fonction des proportions réellies (9% et 20%) ou hypothétiques (35% et 50%) des femmes cadres dans leur ministère. Indépendamment du nombre, les attitudes des femmes (N = 158) se sont avérées plus favorables que celles des hommes (N = 160). Cependant, l'évaluation du statut des femmes cadres, la perception de leur apport à la culture d'entreprise et les attributions sur leur compte en fonction des quatre pourcentages ne concordaient pas avec ces attitudes. Les différences de sexe et le manque de cohérence entre ces différentes mesures ont donné lieu à un examen plus approfondi de leurs relations les unes avec les autres, au moyen de l'analyse des structures de causalité. Effectuées séparément pour les deux sexes, les analyses ont révélé des agencements différents des variables pour les hommes et les femmes. Les attitudes de ces dernières sont directement liées aux attributions faites sur leur compte, celles de hommes à la force numérique. La discussion suggère que la force numérique représenterait une condition nécessaire mais non suffisante au changement des attitudes vis‐à‐vis des femmes cadres.

According to Kanter (1977), attitudes towards female managers will likely become more favourable as their numbers increase until a critical mass of 35% is reached. This hypothesis was partially supported by the results of a study conducted in Canada. The attitudes of 354 managers of the Federal public service were measured as a function of actual (9% and 20%) or fictitious (35% and 50%) proportions of female to male managers in their departments. The results indicated that attitudes towards female managers were more positive amongst women (N = 158) than amongst men (N = 160), regardless of the ratios. The respondents' evaluations of the female managers' status and of their contribution to the culture of the organization were not consistent with expressed attitudes nor were the attributions for their managerial behaviour. In order to assess the relations amongst these variables, the present study included them in a theoretical model that was tested using Path Analysis for each gender group. Results showed that attributions are directly related with women's attitudes, while ratios are related directly with those of men. These findings suggested that an increase in the ratio of female to male managers is a necessary but insufficient condition to change attitudes towards female managers.
International Replication Note Decision Type, Organisational Control, and Acceptance of Change: An Integrative Approach to Participative Decision Making
Authors: Sagie Abraham , Koslowsky Meni
Published: January 2008

On a développé un modèle intégrateur de la relation existant entre la participation à la prise de décision à 1'occasion d'un changement dans 1'organisation et les attitudes professionnelles (implication, satisfaction et sentiment d'efficacité). Le modèle présente une variable indépendante, la décision, stratégique ou tactique, concernant le changement et deux variables intermédiaires, la somme des contrôles exercés dans 1'organisation et 1'acceptation du changement. Grâce à un échantillon de 232 fonctionnaires, on a pu montrer que le modèle “Participation à la prise de décision tactique somme des contrôles acceptation du changement attitudes professionnelles” rendait mieux compte des données que les modèles concurrents. Diverses questions théoriques et pratiques sont discutées et les limites de la recherche soulignées.

An integrative model of the relationship between participation in decision making (PDM) during an organisational change and work attitudes (organisational commitment, job satisfaction, and sense of effectiveness) was developed. The model contains one antecedent variable, type of change decision (i. e. strategic or tactical), and two mediators, total organisational control and change acceptance. A sample of 232 government workers provided evidence that the proposed model, PDM in tactical decisions total control → change acceptance → work attitudes, fits the data better than competing models. Theoretical and practical considerations are discussed and limitations for the study outlined.
Prospects for the world economy in the 1980's
Authors: BURNS TERRY , DICKS GEOFFREY
Published: January 2008

Judged by the conventional measures of the growth of output and trade, of inflation and unemployment, the economic performance of the industrial countries has undergone a marked deterioration in recent years. It is now feared that a further deterioration could take place over the next decade leading to ever greater pressures within and between countries. In this Briefing Paper we attempt to measure the changes that have taken place, to identify their timing and the proximate causes. On the basis of recent developments and a historical perspective we try to judge the prospects for the 1980's.
Briefing Paper Import Penetration in the United Kingdom
Authors: BEENSTOCK MICHAEL , WARBURTON PETER
Published: January 2008

There is widespread concern about the growth of imports in the United Kingdom. British industry is said to be ‘bleeding to death’ as a result of foreign competition and calls are heard for protective measures such as import controls to save the economy.

There are three elements in the case for protection. The first is that trends in Britain's foreign trade in manufactured goods have been extremely adverse and that there are no good grounds for believing that they will change spontaneously. The second is that the growth of the economy is constrained by the balance of payments and that consequently a serious and growing depression will develop throughout the 1980s which could reach catastrophic proportions towards the end of the decade when North Sea oil production declines. The third is that import controls are an effective way of coping with the problem. It is recognised that the second two elements are controversial. As it happens we disagree with both of them. However, it is generally assumed that the first element ‐ the view that increasing import penetration will destroy British industry ‐ is common ground and that no‐one disagrees with it. Our aim in this Briefing Paper is to challenge this view.

There is no doubt that import penetration (which we measure as the share of imports in GDP) has growth rapidly, especially over the past two decades. In 1960 imports amounted to 25 per cent of GDP. By 1970 this proportion had risen to 28 per cent and in 1979 it had risen to 35 per cent. However, we shall argue that the economic processes that have been responsible for this development have on the whole been poorly understood. We reject the popular view that Britain is structurally unable to compete in world markets. Instead we propose an alternative interpretation of import penetration which explains UK trade performance in terms of the broader pattern of the world trade order. In the light of this theory we argue that import penetration in the UK is not an inexorable trend reflecting the relative weakness of the UK in international trade. On the contrary, UK import penetration has been adjusting to a new world trading environment and now that this process of adjustment is nearing completion the rate of increase of import penetration seems likely to abate. Moreover, the British people have benefited from this greater degree of free trade and any protective measures designed to inhibit the economic forces that we describe below would damage the economic welfare of the British public as a whole.
Monetary Targets and the World Economy: A Progress Report
Authors: BUDD ALAN , DICKS GEOFFREY
Published: January 2008

The recent changes in the value of the dollar and the talk of an interest rate ‘war’ demonstrate again that the world finds it difficult to cope with rapid exchange rate movements. In some ways the experience ‐ and the reactions to it ‐ are similar to the events of 1978. As now, the world was in a recession (though on a milder scale) and there were fears that exchange rate problems would obstruct economic recovery. The main difference is that in 1978 it was the strength of the Deutschmark which caused concern whereas this time the problems are associated with the rise in the value of the dollar.

In a Briefing Paper in Economic Outlook, February 1978, ‘Monetary Targets and the World Economy’ we suggested that the problem arose from inconsistencies between national monetary policies and exchange rate objectives. In general, countries dislike exchange rate changes ‐ in either direction ‐ and there were problems because countries would not accept the exchange rate consequences of their own or other countries' monetary policies. We estimated the required monetary policies for stable exchange rates and suggested specific national monetary targets for 1978 which would at least move the world economy towards consistent monetary policies. In this Economic Viewpoint we return to those ideas. We consider what happened in 1978 and we also revise the underlying monetary rules. More recent experience suggests that although there has been some progress towards the convergence of monetary policies there will continue to be trend changes in exchange rates. It is also clear that there will be short‐term fluctuations around these trends. We believe that greater convergence of monetary policies would be desirable but failing that it is important that countries should avoid abrupt changes in monetary policy. It is also important that countries should become accustomed to exchange rate changes. They should direct monetary policy towards their objectives for inflation and should not be diverted from it by temporary or permanent changes in their exchange rates.
The Public Expenditure Debate
Authors: SMITH DAVID
Published: January 2008

This Briefing Paper is concerned with the structural implications of public expenditure for economic performance. It examines the growing role of public expenditure in Britain over the past hundred years, and compares the current share of public spending in the UK with that in other developed countries. Since overall public expenditure does not appear to be a useful concept in the context of the structural debate, the distinctions between different types of public expenditure are emphasised The main purpose of the Briefing Paper is to clarify the current debate.
Tightening the Fiscal and Monetary Controls
Authors: BUDD ALAN , BEENSTOCK MICHAEL
Published: January 2008

The Medium‐Term Financial Strategy (MTFS) is a new departure in post‐war policy‐making. As David Smith's Briefing Paper shows the ideas behind it are well rooted in historical experience, but nevertheless it was inevitable that there would be a major element of trial and error in the early years of its use. The experience of 1980‐81 however has produced some alarming results. The monetary limits have been drastically exceeded and the PSBR is likely to be far above the original target. There are two possible explanations. Either the control system is gravely defective or the government has deliberately followed the kind of short‐term discretionary policies (and has indulged in the kind of ad hoc interventionism) which the strategy was expressly designed to avoid. We believe that both explanations are true. It is also probable that they reinforced each other. The first year of the strategy was likely to be the year of greatest strain. It involved a highly ambitious attempt to reduce inflation at a time when cost pressures from wages and higher energy prices were particularly strong. The strains rapidly revealed the defects in the control system. Since the government was alarmed at the short‐term consequences of its policies, it chose to make a virtue of necessity and in effect suspended its commitment to the control of sterling M3.

It is possible to look back at 1980 and to say that, in the event, the government's loss of control over its policies was justified as statesmanlike flexibility. But there always appear to be good reasons for sacrificing long‐term objectives for short‐term expediency. The MTFS was intended to avoid the chronic tendency to accept the easy option. It is essential that in 1981 the commitment to the MTFS should be re‐established and that it should be reinforced, as appears to be necessary, by a system of indicators and controls to ensure that the errors of 1980 are not repeated. Otherwise there is a serious risk that the hard‐won gains in the fight against inflation will be lost in the economic upturn.

In the first part of this Viewpoint we examine what happened to fiscal and monetary policy in 1980 and discuss the general lines that policy should follow in 1981‐82. We conclude that in order to get fiscal policy back on course the authorities should aim for a PSBR of £10 bn in 1981‐82. In the second part we discuss in more detail the reasons why monetary policy went so badly astray in 1980, focusing particularly on the role of the Bank of England. We argue that just as ‘dirty floating’ (i.e. the pursuit of exchange rate objectives) may threaten the monetary targets, so ‘dirty monetarism’ (i.e. the pursuit of interest rate objectives) may prove an even greater threat. We conclude that the discretionary activities of the Bank of England contributed to the excessive monetary growth in 1980, and that it is necessary to ensure that in future the Bank should conduct its policy on a non‐discretionary basis.
The Counter‐Inflation Strategy in Historical Perspective
Authors: SMITH DAVID
Published: January 2008

The government's counter‐inflation strategy is often described as an experiment Such a view implies that present policies are without historical precedent and their likely consequences unpredictable. This Briefing Paper attempts to broaden the current policy debate by placing the counter‐inflation strategy in the historical context of the UK's inflationary experience of the past one hundred years. A hundred years' data allows a very wide range of economic experience to be studied. The methods used are a mixture of historical case studies and time series regression analysis (described in the Appendix). One case study describes the rapid inflation of the 1914‐18 war and the successful counter‐inflation strategy of the early 1920s. This period has remarkable similarities with the present. The second case study re‐examines the inflation of the 1970s. Our research shows that the government's counter‐inflation strategy has a much better chance of success than is often believed. The authorities can permanently reduce the inflation rate if they control both the PSBR and the money supply and resist pressure to peg the exchange rate. While this involves a severe recession, the evidence suggests that the real economy also has strong self‐stabilising properties. In the past, even deep recessions have always been followed by recoveries, often spontaneously generated within the private sector.
The London Business School with Gower WORLD OUTLOOK
Authors: Dicks Geoffrey , Robinson Bill
Published: January 2008

Although there are indications that the world economy is beginning to emerge from recession, the early stages of recovery are turning out to be extremely weak and industry worldwide has still not recorded any significant advance. Consequently business planners are now having to take account of the possibility that there will be no recovery during 1982 or even that the world will enter a prolonged downturn. We discuss these scenarios here and indicate why we consider them unlikely; our central forecast remains that the world economy will enter a recovery phase towards the end of 1982 and grow strongly in 1983‐84.
Forecasting Errors: the Track Record
Authors: ROBINSON BILL
Published: January 2008

This Briefing Paper is the last of a series of three about forecasting. In this one we examine our forecasting record; it complements the February paper in which we analysed the properties of our forecasting model in terms of the error bands attached to the central forecast.

There are many ways of measuring forecasting errors, and in the first part of this Briefing Paper we describe briefing how we have tackled the problem. (A more detailed analysis can be found in the Appendix.) In Part II we report and comment upon the errors in our forecasts of annual growth rates and show how our forecasting performance has improved over the years. In Part III we focus on quarterly forecasts up to 8 quarters ahead, and compare our forecasting errors with measurement errors in the oficial statistics; with the estimation errors built into our forecast equations; and with the stochastic model errors we reported last February. A brief summary of the main conclusions is given below.
STERLING AND THE DOLLAR: SIMILARITIES AND DIFFERENCES
Authors: Dicks Geoffrey
Published: January 2008

In the first two years of the Conservative government elected in May 1979 sterling rose 25 per cent on a trade weighted basis. It then fell back and is currently little changed from the level inherited by the Conservatives. In the first two years of the Reagan administration the dollar rose 30 per cent on the same basis. It too fell back thereafter, but only briefly ‐ throughout 1983 the rise of the dollar has been resumed and it now stands at its highest level for at least twenty years. In this Forecast Release we examine the similarities and differences between these two currencies. We argue that a crucial element explaining the performance of the currency has been the size and expected development of the public sector deficit and that prospects for the dollar depend crucially on this. A sharp fall in the dollar could occur in the next year or two if rapid growth of output begins to produce a signijcant reduction in federal borrowing.
The Economy: Returning to Balance?
Authors: BUDD ALAN , DICKS GEOFFREY
Published: January 2008

In October 1981 in “An Economy Out of Balance” we examined the state of the economy following the severe shocks of 1979 and 1980. We warned that adjustments in some markets, particularly for goods and labour, might be “painfully slow”, In this Viewpoint we bring that study up to date. We argue that the recent fall in the exchange rate has helped to correct some of those imbalances and that there should now be the basis for a recovery of output and a check to the rise in unemployment.
WORLD OUTLOOK
Authors: Dicks Geoffrey
Published: January 2008

The world recovery, now 18 months old, suffered two major setbacks in May: heightened political tension in the Middle East and a crisis in financial markets following a rise in US interest rates. On the assumption that oil supplies are not disrupted, we forecast that industrial production in the OECD area will rise by 7per cent in 1984 compared with 1983 and that total GNP will be 4 per cent higher. The Fed3 decision to tighten monetary policy, and run the risks of a US banking crisis, underline its determination to prevent the re‐emergence of high inflation in the US. Higher interest rates are expected to produce a pause in the US recovery later this year, but, by reining back the economy and dampening down inflationary expectations, they should avert both a return to high inflation and the need for a more pronounced US recession at a later date. Compared with the January forecast, therefore, in which we assumed that, for political and debt‐crisis reasons, the US authorities would avoid a rise in interest rates, the present forecast embodies higher interest rates and an earlier pause in the American recovery but, in the medium term, lower inflation and steadier growth of output. For the European and Japanese economies, where policy has remained more restrictive throughout, we have not changed our view that inflation will continue either to remain low (West Germany, Japan) or to moderate (France, Italy), thereby underpinning a sustainable medium‐term recovery.
Savings, Personal Wealth and Risk
Authors: ROBINSON BILL , DAVIES KATY , MARKOSE SHERI
Published: January 2008

In this Briefing Paper we examine the underlying determinants of personal savings behaviour to substantiate our view that the recent fall in savings rates does not imply that it must in future bounce back to some more normal level. On the contrary there are good reasons for believing that savings are more likely to go on falling than to rise.

We argue that consumer behaviour should be related explicitly to personal wealth as well as to disposable income. Personal wealth has risen substantially since 1982: the fall in inflation and long‐term interest rates has pushed up gilts' prices; the recovery of profits has sparked off a stock market boom; and the value of the housing stock, which is by far the most important asset held by the personal sector, has started to rise again in real terms. This rise in asset values means that, despite a rise in consumption financed by borrowing, the personal sector balance sheet still in a healthy state, particularly when account is taken of the personal savings now held indirectly via pension funds. These have risen rapidly recently, reducing the need for other long‐term savings.

The rise in total wealth has increased savers' tolerance of a fall in net liquid assets (bank and building society deposits etc less borrowing). The willingness to hold a smaller (precautionary) stock of net liquid assets may also reflect a perceived reduction in risk. Financial markets have been much more stable over the period since 1975 than over the preceding eight years, and may now be signalling that the period of adjustment to the shocks and disturbances of the 1970s is drawing to an end. The fall in savings is a worldwide phenomenon. As in the UK it is linked to the fall in inflation and may also be connected with the recovery of the world's major stock markets.
FOOLING ALL OF THE PEOPLE
Authors: Keating Giles
Published: January 2008

The public's expectations about government policy are a key influence on the economy and can be more important than the policy itself. By allowing the public to know that it is considering reflation outside the Medium Term Financial Strategy, the government is reducing the credibility of the MTFS. This Forecast Release draws on some of the latest developments in economic theory, in the field of ‘time inconsistency’, to argue that the early years of the MTFS suffered from continuing but incorrect expectations that the policy would be abandoned. To avoid repeating this mistake, the government should promptly concede the current calls for reflation if it is unable to resist them, although a preferable outcome for unemployment and inflation can be achieved by re‐affirming the MTFS. A worse outcome than either of these is obtained if the government continues with the MTFS while leaving open the possibility of a sudden reflation.
Briefing Paper: Why has the economy recovered?1
Authors: BUDD ALAN , DICKS GEOFFREY
Published: January 2008

By the end of last year GDP (though strike affected) was 9 per cent higher than in the first half of 1981, an annual growth rate of 2.5 per cent. In this Briefing Paper we seek to explain the recovery from the recession. We conclude that much of the recovery represents a natural response of the economy after the oil and price shocks of 1979‐80. The recovery occurred in spite of the deflationary Budget of 1981 and the sharp rise in interest rates in the autumn of 1981. Since 1981 fiscal policy has been stable, whereas the original intention was to tighten fiscal policy progressively in subsequent years. This stability and the fall in the inflation rate that accompanied it allowed growth to resume. We believe that the upturn would have been rather weaker (though inflation would have been lower) if the progressive tightening of the original Medium‐ Term Financial Strategy had been adhered to.
Briefing Paper
Authors: BUDD ALAN , LEVINE PAUL , SMITH PETER
Published: January 2008

Between the end of 1979 and the end of 1981 unemployment rose by 1.4 million. After that exceptional period unemployment continued to rise rather less rapidly to its current level of 3.2 million, Of this 3.2 million, about 1.3 million have been unemployed for more than a year. In this Briefing Paper we describe and attempt to explain the processes by which long‐term unemployment rose to its current level.

We also discuss two related questions; the first concerns the relationship between unemployment and vacancies and the second concerns the relationship between long‐term unemployment and inflation. The final sections consider the policy implications of these findings.
Towards Exchange Rate Stability?
Authors: BUDD ALAN , DICKS GEOFFREY
Published: January 2008

At their recent meeting in Washington the Group of Seven reafirmed their desire to hold exchange rates at about their current level. In this Viewpoint we consider the prospects for success. We conclude that although current rates are feasible in terms of competitiveness, the system will remain under strain as long as there are major inconsistencies between jiscal policy in the US and the rest of the world. The present conjuncture of interest rates and inflation points to a further dollar depreciation. It would be better, in our view, to enact this quickly and to attempt to stabilize exchange rates at sustainable levels: the policy of holding the dollar is misguided.
POST‐CRASH INDICATORS
Authors: Dicks Geoffrey
Published: January 2008

The stock market crash has inevitably awakened fears that the world economy may be on the brink of recession. We examine the movement in output pre‐ crash and the evidence which is so fat available for the fourth quarter. The response of policy makers is also considered. We conclude that, ahead of the crash, output was rising strongly and that there are no signs yet of a slowdown. In the US consumer confidence has been dented, but elsewhere easier fiscal and monetary policy may fully compensate for the crash
WORLD OUTLOOK
Authors: Dicks Geoffrey
Published: January 2008

Relative to what we expected following the collapse in the oil price, growth in the OECD economy was disappointing last year and, with activity still not registering a convincing pick‐up, we have lowered our forecast for 1987–88. Previously we argued that the sharp drop in oil prices from around 27 a barrel in 1985 to an average of 15‐16 last year represented a significant boost to real incomes in the oil‐consuming countries. Notwithstanding the corresponding real income loss to the oil producers, we expected OECD demand to rise sharply in the course of last year, with clear benefits to output becoming apparent by the end of the year. In the event this analysis, though correct in outline, has apparently underestimated the negative elements ‐ tighter fiscal policy, the failure of consumers in some countries to obtain the terms of trade gains from lower oil prices and/or currency appreciation, the offset to domestic demand from falling exports. Consequently, we now expect OECD output to rise by only 3 per cent p. a. over the next two years. The corollary of this is that inflation is also unlikely to record a marked increase and this enhances the prospect of sustained output growth in the medium term. The forecast combines steady output growth of around 3 per cent p. a. with inflation stable in the 3–4 per cent range.
WHAT HAS HAPPENED TO THE CYCLE?
Authors: Dicks Geoffrey
Published: January 2008

The Chancellor reminded us in his Budget speech that “the British economy is now embarking on its seventh successive year of steady growth, at an average rate of getting on for 3 per cent a year”. This experience contrasts markedly with that of the 1970s and is dissimilar from that of the 1960s. Here we examine the recent behaviour of the economy, particularly with regard to the cycle. We conclude that the cycle is not dead and that since the trough of 1981 the economy has passed through two further turning points. If a correction is made for the miners' strike, activity peaked in late 1984, reached a trough in 1985 and is currently once more growing at an above‐trend rate.
Productivity and Inflation: a Paradox
Authors: BUDD ALAN , DICKS GEOFFREY , ROBERTS MELANIE
Published: January 2008

In his Budget speech, Mr. Lawson drew attention to the greatly improved record of productivity growth in UK manufacturing:

“During the 1960s, and again in the 1970s, growth in manufacturing productivity in the UK was the lowest of all the seven major industrial countries in the world. During the 1980s, our annual rate of growth of output per head in manufacturing has been the highest of all the seven major industrial countries.”

Ironically this success in regard to productivity may cause a problem in regard to inflation if the UK moves to a fixed exchange rate policy within the EMS. In this Viewpoint we report the consequence of such a move and also describe the possible required rise in the exchange rate if price stability is to be attained. We show that price stability requires the exchange rate to rise (i) to offset world inflation and (ii) to compensate for the productivity gap between the traded and non‐traded sectors.
Long‐term Unemployment and the Labour Market: some further results
Authors: BUDD ALAN , LEVINE PAUL , SMITH PETER
Published: January 2008

In a previous Briefing Paper we discussed the current high rate of long‐term unemployment. We described the process by which the ratio of long‐term unemployment to total unemployment was determined and suggested some explanations for the rapid rise in long‐term unemployment since 1980. We also investigated the role of long‐term unemployment in shifting the relationship between unemployment and vacancies. In this Briefing Paper we extend our study to consider the relationship between unemployment and inflation. In particular we discuss the apparent failure of high unemployment to affect the growth of real wages. Finally we compare some policies for reducing unemployment.
A VERY PRIVATE BOOM
Authors: Dicks Geoffrey
Published: January 2008

Last year output rose nearly S per cent, the fastest rate of growth since 1973. But domestic demand rose even more rapidly and has continued to outpace supply this year. Consequently, the current account of the balance of payments has moved into deficit. One feature of the present boom, which distinguishes it from its predecessors, is that it is private sector demand which is the driving force — the direct contribution of the public sector has been far less marked, even minimal. In this Forecast Release we examine the behaviour of private spending and contrast the present boom with previous experience. We conclude that there are sound theoretical reasons why UK private saving should be reduced for a shoe period and that, if the reduction is temporary, the government's apparently relaxed attitude to the current account deficit is justified.
THE CURRENT ACCOUNT
Authors: Dicks Geoffrey
Published: January 2008

In the first half of this year the current account deficit widened sharply to £5.6bn, well above the Chancellor's full‐year Budget forecast of £4bn and our own most recent forecast of £5bn. In this Forecast Release, we show that imports have continued to grow very rapidly but export growth has slowed down. This is in contrast to 1987 when exports were strong, very nearly keeping pace with imports. It can be said therefore that this year's balance of payments deterioration owes more to a failure of exports than to rising imports. As to why this has happened, we show that part of the explanation is a two‐year decline in UK competitiveness but that the more important cause is the continuing strength of domestic demand which has not only sucked in imports but also diverted possible exports to the home market.
Investment: A Worldwide Boom
Authors: DICKS GEOFFREY , DINENIS ELIAS , HOLLY SEAN
Published: January 2008

Investment is booming: not only in the UK but also in the US, Japan and in Europe. In this Briefing Paper we seek to understand why this is happening – a global phenomenon clearly requires a global not a local explanation – and to consider whether the boom will continue. To this end (and not in order to discriminate between alternative theories of investment), we examine the main theories of investment and show that recent developments are consistent with models based on the accelerator, or which emphasize the cost of finance or which depend upon stock market valuation effects. And, no matter which theory holds, the implication is the same: investment will weaken in 1989 and this is an important element in our forecast of slower world and UK growth next year.

But there is an alternative view, which implies a more optimistic outlook. The theories which we consider are essentially cyclical: they focus on the key role of (volatile) investment spending in the business cycle. It may well be that the present surge in investment is a long‐tern, structural phenomenon reflecting either a shift in the pattern of world demand or the spread of computer‐based technology, which has raised the efficiency of investment. In this case, and notwithstanding this year's surge in investment, tighter monetary policy and the stock market crash, the present boom in investment may have a lot further to run.
The London Business School with Gower Publishing
Authors: Dicks Geoffrey
Published: January 2008

There are enough similarities in the performance of the British and Spanish economies in recent years to make the entry of the peseta into the EMS on 19 June an event of interest to UK observers. Faced with the problem of overheating, the Spanish authorities have chosen to use the external discipline of a fixed exchange rate as a way of fighting inflation. In similar circumstances, the UK has opted for autonomy, preferring to use internal monetary discipline to bring inflation back down to the European average ‐ itself one of Mrs. Thatcher's conditions for EMS entry. Over the next year or two it should be possible to form a view on the relative merits of the two approaches to counter‐inflation policy.
The London Business School Gower Publishing
Authors: Dicks Geoffrey
Published: January 2008

The 1989/90 payround is under way against the background of the highest rate of inflation in nearly seven years, the lowest rate of unemployment since December 1980 and a spate of industrial disputes which feature pay as a central theme. Reflecting this, pay settlements are moving higher and whole economy earnings are rising at an underlying rate of 9.25per cent, compared with only 7.5 per cent in early 1987. The obvious danger, with the labour market remaining tight, is that earnings will accelerate further, possibly into double figures. If this were to coincide with slower output growth, unit labour cost inflation would increase sharply, either threatening the government's inflation objectives or, as in 1980–81, resulting in a squeeze on profits ‐ a hard landing. In our June forecast, we ruled out this possibility ‐ at least as the central case ‐ but at the same time we warned that “the main economic danger lies in this area: if wage bargainers are successful in bidding up wages to compensate for higher retail price inflation, the battle to reduce inflation could be even more protracted than our forecast suggests and output prospects too would be that much weaker”. In this Forecast Release we return to this theme.
The London Business School with Gower Publishing
Authors: Allen Chris , Dicks Geoffrey
Published: January 2008

Last year saw the most coordinated cyclical upturn in the world economy since the early I970s, with OECD output rising 4per cent, industrial production and world trade even more rapidly. The boom in demand, which followed five years of continuous expansion, has outstripped supply and prices have begun to accelerate. To tackle inflation, the G7 monetary authorities have tightened policy over the last year, reversing the short‐lived drop in interest rates necessitated by the stock market crash. This tightening may have to go further, especially in Germany and Japan where the effects of a rising oil price and higher indirect taxes are being exacerbated by currency depreciation. Although the rise in interest rates came too late to stop inflation rising, it has beet pursued with sufficient vigour to prevent inflation from seriously breaching the 5 per cent level. It is on these grounds that we forecast a relatively soft lending for the world economy on output, with growth continuing at 2.5–3per cent, accompanied by a limited reduction in inflation which stays in the 4–5per cent range. Progress on current account balances is also likely to be sluggish: in the absence of a serious attack on the budget deficit, the US deficit is likely to stay in the region of $140bn a year.
THE POUND AND THE PUNT REVISITED
Authors: Burrell Andrew , Dicks Geoffrey
Published: January 2008

Whereas the pound has remained outside the EMS for the last ten years, the Irish punt has been a fully participating member since the inception of the EMS in March 1979. As such the punt experienced the depreciation of the EMS bloc against the pound in 1980‐1 and, largely because of this, it suffered from a higher rate of inflation in the first half of the 1980s. But against a background of greater intra‐EMS stability, Irish inflation has fallen steadily. It is now closer to German inflation than at any time in the last twenty years and in the nearly three years since the last EMS realignment, has been well below inflation in the UK. At the same time output in Ireland has advanced steadily and the trade balance has moved into surplus. The Irish experience has therefore paralleled that of the EMS as a whole. After a shaky start, the EMS has proved to be a powerful force for convergence and by switching from a fixed link to the pound to one against the DM, the Irish economy is being transformed into a relatively low inflation economy. The contrast with the pound panty period is marked. It is different not to conclude that the UK' recent economic performance, particularly on inflation, would have been significantly improved if it too had chosen the route of full EMS membership.
THE AUTUMN STATEMENT
Authors: Currie David , Dicks Geoffrey
Published: January 2008

The short‐term prospects for output are weaker than our October forecast suggested ‐ manufacturing output fell 1.8per cent in the third quarter and the CBI survey indicates a sharp decline in business confidence. This is reflected in the Treasury's Autumn Statement forecast of GDP growth this year of only 1 per cent followed by 0.5per cent in 1991. With inflation now passing its peak, there would be a case for lowering interest rates but this is not possible with the pound below DM2.90 ‐ the ill‐judged reduction in base rates on ERM entry combined with the challenge to Mrs. Thatcher's leadership has pushed sterling deep into its lower ERM band. The principal unknown in the Autumn Statement forecast is the level of interest rates which, in the Treasury's judgement, will be necessary to keep sterling at or close to DM2.95. The Treasury may envisage only a very modest decline in base rates to 13 per cent next year. This could explain why their forecast is relatively gloomier than ours; alternatively the Treasury's underlying view could simply be more pessimistic. Nevertheless we show that the gap between the two forecasts can be eliminated if we change a limited number of assumptions ‐ notably on interest rates, North Sea oil output, general government consumption and stock‐building.
THERE'S MANY A SLIP…
Authors: Currie David , Dicks Geoffrey
Published: January 2008

There has to be a General Election at some time in the next eighteen months. It has long been clear that the economy will not be in the best of shape in time for the election and that the best the Conservatives can hope for is a significant reduction in inflation and interest rates together with modest output growth. Our October forecast suggested that this combination was feasible and that the government would be able to go to the country with base rates of 12 per cent, retail price inflation at half its present level and output growing at a rate of 2per cent after a relatively short and shallow recession. It may turn out that this is an overly optimistic central forecast and in this Forecast Release we examine some of the ways in which it could go wrong. In a worst possible scenario the government may have to face the electorate with the economy in recession, inflation high and interest rates still at or close to their present levels.
IS THE WORLD SHORT OF SAVINGS?
Authors: Dick Geoffrey
Published: January 2008

The opening up of Eastern Europe may give rise to a surge in investment as the former socialist economies move to a market‐based system. The scope for modernization of the region in terms of its industrial, environmental and social capital raises the question of how the increase in demand can be accommodated. Since the Ergonomic shock of the early 1980s, most of the world's net saving has been provided by Japan and West Germany in the form of huge current account surpluses. If GMU now implies a significant drop in German savings, does this mean, as the OECD has recently suggested that there is a risk that world savings will be inadequate?
WORLDOUTLOOK
Authors: Allen Chris , Burrell Andrew , Mitsui Tadasu , Dick Geoffrey
Published: January 2008

German monetary unification is expected to result in a major expansion in autonomous demand from East Germany. In economic terms this is equivalent to a fiscal shock to West Germany broadly similar to that experienced in the US in the early years of Mr. Reagan's Presidency. Led by the Bundes bank, the monetary authorities' response is again likely to be a tightening of policy, leading to several years of high real interest rates. Overall, the combined monetary‐fiscal shock should strengthen growth with only moderate increases in inflation. Germany is expected to grow very rapidly in the ‐per cent range for several years, with only a slight upturn in inflation. Japan, after a pause over the next year, should be able to return to its under lying growth path fairly quickly. However the US situation is more precarious. FUN adjustment from the previous Reagan shock has not yet taken place, leaving the US vulnerably dependent on increasingly scarce imported capital. In the absence of a significant *peace dividend: the result is the necessity of continued tight policy and sluggish growth in the American economy. US growth stays around 2 per cent, but this allows a substantial reduction in the current account deficit.
Economic Outlook 1990–1994: The London Business School with Gower Publishing: Forecast Release: THE 1991‐92 WAGE ROUND
Authors: Burrell Andrew
Published: January 2008

The current wage round begins under circumstances markedly different from the previous one. A year ago the Department of Employment measure of the underlying growth in average earnings was, at 10 per cent, higher than at any period since the 1979‐80 pay explosion. Following the invasion of Kuwait there were considerable dangers that cost pressures would initiate a wage‐price spiral. In the event the hike in oil prices had only a small and temporary effect on headline inflation rates, which was more than offset by deflationary pressures resulting from the worse‐than‐expected economic downturn. In addition, UK entry to the ERM in October meant a major shift in the conduct of economic policy. The need to maintain the pound at its high central parity introduced extra discipline into pay‐bargaining by ruling out the accommodation of uncompetitive wage rises through depreciation.