Comment:The Statistical Relationship between the Money Supply and the Public Sector Borrowing Requirement

MICHAEL BEENSTOCK*, ANDREW LONGBOTTOM

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

A controversy has recently broken out as to whether the PSBR influences the money supply in the UK. Clearly if this relationship does not exist much of the basis of the government's macroeconomic strategy falls away since the government is acting on the assumption that by controlling the PSBR it will be able to control money supply growth and hence inflation in the medium term. This argument has been forcibly stated in the recent Green Paper on Monetary Control (Cmnd 7858) and is enshrined in the Medium‐term Financial Strategy that was announced in the March Budget.

Original languageEnglish
Pages (from-to)27-31
Number of pages5
JournalEconomic Outlook
Volume4
Issue number9
DOIs
StatePublished - Jun 1980

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