Balance of Payments, Deindustrialisation and Protection
Despite the pain of being branded a ‘monetarist’ by some of his colleagues, despite an equally hostile reception from monetarists when presenting ‘New Cambridge’ ideas in the USA, Godley continues to view the ‘Keynesian’ remedy of expansionary fiscal policy as seriously flawed unless the problem of fast-rising imports is solved. He finds support from another Cambridge group working in problems of deindustrialisation, whose acceleration in the UK has made it impossible to keep full employment without an external deficit, and restrained productivity growth. Negative evaluations of the effectiveness of past devaluations, and the uncomfortable experience of designing one in 1967, leave Godley convinced that UK problems cannot be solved without direct control of imports, a policy he continues to advocate despite coming under almost universal fire.
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