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Author(s) -
Dicks Geoffrey
Publication year - 1989
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/j.1468-0319.1989.tb00454.x
Subject(s) - economics , inflation (cosmology) , publishing , government (linguistics) , metaphor , political science , law , linguistics , philosophy , physics , theoretical physics
The debate amongst economic forecasters currently centres on whether the UK will experience a “hard” or a “soft” landing. Those outside this narrow community probably have an intuitive feel for what is implied by the metaphor and understand that the recent swing in City opinion towards a hard landing implies a less favourable overall economic performance. But what precisely constitutes a “landing” ‐ soft or hard ‐ and why is the City view moving towards the latter? In this Forecast Release we show that the debate revolves around the cost in output and employment terms of the government's policy to remove excess demand and hence reduce inflation. This cost in turn depends upon the government's ultimate inflation objectives, the extent that demand is currently excessive and the speed with which that excess demand is removed by high interest rates. Doubts on the two last explain the recent hardening in City attitudes.