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, especially given the role of three Cambridge economists -- Nicholas Kaldor, Wynne Godley and Francis Cripps – as ministerial advisers at the time. The records show the Treasury and the CEPG eventually meeting near the middle regarding the latter’s proposition of stable private-sector NAFA (Net Acquisition of Private Sector Assets) and its implications for demand management and the balance of payments. By contrast, the initial differences on counter-inflation policy and, above all, on import controls versus free trade were wider at the end of the decade than at the start of it.