The Treasury and the New Cambridge School in the 1970s

With the release of Treasury papers from the 1970s under the 30-year rule we have a much more complete picture of the dispute in the 1970s between the Treasury and the Cambridge Economic Policy Group (CEPG), especially given the role of three Cambridge economists--Nicholas Kaldor, Wynne Godley and Francis Cripps--as ministerial advisers at the time. The records show some eventual closing of the gap between the Treasury and the CEPG regarding the latter's proposition of stable private-sector NAFA (where NAFA stands for net acquisition of private sector assets) and its implications for demand management and the balance of payments. In contrast, the initial differences on counterinflation policy and, above all, on import controls versus free trade were wider at the end of the decade than at the start of it. Copyright The Author 2012. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.