In the 1960s monetary policy had only a limited contact with the monetary policy discussed in textbooks. It was largely a collection of administrative devices intended to improve the balance of payments and moderate excess demand. It was neither aimed at controlling the stock of money nor was it much relied upon to combat inflation. From 1961 onwards, incomes policy was regarded as a more appropriate weapon for that purpose and fiscal policy had for many years been the favoured instrument of demand management. Raising interest rates had the disadvantage of being particularly discouraging to investment, which was regarded as of major importance to economic growth.
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- Monetary and Financial Policy in the 1960s
Sir Alec Cairncross
- Palgrave Macmillan UK
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