Inflation in the United Kingdom, 1948-1957

The Phillips Curve and an Assumed Unique Macroeconomic Equilibrium in Historical Context

“…Keynesians argued that running the economy with high aggregate demand pressure would provide the profits needed to finance investment, and the demand needed to induce firms to raise productivity—albeit at the cost of some mild inflationary pressure. In contrast to this ‘carrot theory’ of growth, others, of whom professor Frank W. Paish of the London School of Economics was a key advocate, argued that running the economy with low aggregate demand pressure would provide the stick that would encourage economic growth by making it imperative for businesses to raise productivity as the main method that would then be available for sustaining profits (Paish 1958, 1962, 1970).…”

The Composition of Manual Worker Wage Earnings

“…Consequently, the limited research within this area has relied upon ad hoc hypotheses as a source of testable predictions rather than conditional predictions drawn from some basic bedrock of economic analysis of wage compositionbargaining structure interaction (Paish, 1958;Turner, 1956;Dicks-Mireaux and Shepherd, 1962;Gillion, 1968). * A more fundamental reason is, of course, that economics has no theory cf the rates-earnings-drift nexus, or a theory of the behaviour of bargaining structure which underlines this nexus.…”

“…* A more fundamental reason is, of course, that economics has no theory cf the rates-earnings-drift nexus, or a theory of the behaviour of bargaining structure which underlines this nexus. Consequently, the limited research within this area has relied upon ad hoc hypotheses as a source of testable predictions rather than conditional predictions drawn from some basic bedrock of economic analysis of wage compositionbargaining structure interaction (Paish, 1958;Turner, 1956;Dicks-Mireaux and Shepherd, 1962;Gillion, 1968).…”

“…The major study will in part draw upon the material presented here in attempting a detailed analysis of earnings determination at the broad industry level. Consequently, the limited research within this area has relied upon ad hoc hypotheses as a source of testable predictions rather than conditional predictions drawn from some basic bedrock of economic analysis of wage compositionbargaining structure interaction (Paish, 1958;Turner, 1956;Dicks-Mireaux and Shepherd, 1962;Gillion, 1968).This relative lacuna in economic knowledge is paralleled by that attaching to the historical method of the institutionalist industrial relations approach, most clearly formulated in Donovan. It is concerned with wage composition and the principal focus of attention will relate to the 'importance' of basic pay in weekly earning, 1968-74.…”

“…* A more fundamental reason is, of course, that economics has no theory cf the rates-earnings-drift nexus, or a theory of the behaviour of bargaining structure which underlines this nexus. Consequently, the limited research within this area has relied upon ad hoc hypotheses as a source of testable predictions rather than conditional predictions drawn from some basic bedrock of economic analysis of wage compositionbargaining structure interaction (Paish, 1958;Turner, 1956;Dicks-Mireaux and Shepherd, 1962;Gillion, 1968).This relative lacuna in economic knowledge is paralleled by that attaching to the historical method of the institutionalist industrial relations approach, most clearly formulated in Donovan. Whilst the latter describes the way in which an informal, fragmented and autonomous process of bargaining at the plant level has grown up to occupy a place of at least equal importance alongside the formally recognised machinery of industry-wide bargaining it makes little or no attempt to 'explain' the phenomenon.…”