The success of Monetarism

Question 1

First Term
Initially success looked in doubt

Answer 1

1981, Chancellor Geoffrey Howe found public sector borrowing was increasing (£9.25b in 1978-9 to £14.5b by end of year)
364 economists encouraged govt to abandon monetarism but they didn’t

Question 2

First Term
Commitment paid off

Answer 2

Inflation fell from high of 21.9% in May 1980 to 5% by Dec 1982
Helped Thatcher win 1983 election

Question 3

Second Term

Answer 3

Monetarism phased out in favour of supply-side economics
Inflation never rose above 9% for the rest of the 1980s