100th Issue of the Review : The Economic Review

In January 1959 registered unemployment in Britain reached 620,000, 2.8 per cent of the labour force, and the highest figure since the War. The first issue of the Review appeared in the same month, and its conclusion was that if no further Government measures were introduced, a small rise in output was to be expected. In the event, even allowing for subsequent policy changes, this forecast proved to be a particularly bad one, so that for many years to come a superficial inspection of the sequence of forecasting errors was bound to suggest improvement! 1959 was to turn out to be the year in which: ‘You never had it so good’; in October, in a third consecutive General Election victory, the Conservative government increased its majority from 60 to 102. In 1959 also the yield on ordinary shares fell momentarily to 4 per cent and was subsequently to remain below the yield on Consols. Some concern was being expressed about ‘Stop-Go’ which was soon to lead to experiments in national planning, and some people were worried about the persistence of inflation, but all in all the wind seemed to be set fair for an increasingly affluent society. Confidence in the economy was matched by the assurance of economists that they knew what they were about. Economic research would put quantitative flesh on the bones of the Keynesian model which was not seriously challenged. That early forecasting error would be quickly rectified once the new team got into its stride.