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Was the Thatcher Experiment Worth it? British Economic Growth in a European Context


  • Crafts, Nicholas


The changes in economic policy introduced in the UK after 1979 had a substantial impact on income distribution, unemployment and productivity growth. This paper brings together available evidence in an attempt to evaluate the welfare effects of the Thatcher reforms. The estimated impact turns out to be sensitive to the degree of `inequality aversion' of the investigator and to the method chosen to estimate the counterfactual productivity path. The overall welfare effect may have been either negative or positive but is probably smaller than partisan assessments have claimed.

Suggested Citation

  • Crafts, Nicholas, 1992. "Was the Thatcher Experiment Worth it? British Economic Growth in a European Context," CEPR Discussion Papers 710, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:710

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    References listed on IDEAS

    1. Gabor Oblath & David Tarr, 2017. "The Terms-of-Trade Effects from the Elimination of State Trading in Soviet-Hungarian Trade," World Scientific Book Chapters,in: Trade Policies for Development and Transition, chapter 13, pages 295-313 World Scientific Publishing Co. Pte. Ltd..
    2. Landesmann, Michael & Székely, Istvan P., 1991. "Industrial Restructuring and the Reorientation of Trade in Czechoslovakia, Hungary and Poland," CEPR Discussion Papers 546, C.E.P.R. Discussion Papers.
    3. Dani Rodrik, 1994. "Foreign Trade in Eastern Europe's Transition: Early Results," NBER Chapters,in: The Transition in Eastern Europe, Volume 2: Restructuring, pages 319-356 National Bureau of Economic Research, Inc.
    4. Peter B. Kenen, 1991. "Transitional Arrangements for Trade and Payments among the CMEA Countries," IMF Staff Papers, Palgrave Macmillan, vol. 38(2), pages 235-267, June.
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    Cited by:

    1. Avner Offer, 2000. "Economic Welfare Measurements and Human Well-Being," Oxford University Economic and Social History Series _034, Economics Group, Nuffield College, University of Oxford.
    2. Heather Boushey & Christian E. Weller, 2006. "Inequality and Household Economic Hardship in the United States of America," Working Papers 18, United Nations, Department of Economics and Social Affairs.

    More about this item


    Growth; Inequality; Thatcher; UK;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe


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