§ Mr. Austin Mitchellasked the Chancellor of the Exchequer (1) whether he will circulate in the Official Report a table showing the percentage increase in (a) the monetary base and (b) domestic credit expansion in each quarter since 1969–70 and the percentage increase in retail prices both two years and 18 months later, together with an estimate of the statistical correlation between the money series and the price series in each case and an explanation of its significance;
(2) what is the statistical correlation between the two series referred to in his answer to the question from the hon. Member for Grimsby dated 14 November concerning the percentage increase in the money supply and the percentage increase in retail prices; what is the significance of the correlation in lay terms; if there is any other time lag that gives a significantly better correlation; and, if so, what is the figure and its significance.
§ Mr. LawsonThere is no generally agreed measure of the monetary base. Domestic credit expansion statistics are provided inFinancial Statistics, table 7.3
(a) Money supply. For the United Kingdom (sterling M3) the latest estimates are given in table 7.1 in Financial Statistics, November 1979. For the other countries, the latest estimates based on the IMF's M2 definition are given in the individual country pages in International Financial Statistics, November 1979 (Money (row 34) plus Quasi-money (row 35)). For the United States and France, figures for one or two more recent quarters may be obtained from OECD Main Economic Indicators. November 1979 (M1+Quasi-money) but the IMF and OECD data are not strictly comparable. (b) Gross national product at current and constant market prices. For the United Kingdom the latest estimates at current prices are given on page 83 of Economic Trends, October 1979. Corresponding figures at constant prices are not published quarterly, and the required percentage changes are given in the following table:
GROSS NATIONAL PRODUCT AT CONSTANT MARKET PRICES PERCENTAGE CHANGE ON CORRESPONDING PERIOD OF PRECEDING YEAR United Kingdom (seasonally adjusted) … 1976 1977 1978 1979 Q1 … … +4.0 — +3.2 -0.1 Q2 … … +2.1 +1.0 +4.0 -0.9 Q3 … … +5.4 +0.3 +4.4 Q4 … … +4.5 +1.0 +2.6 For other countries, the latest estimates are given in OECD Quarterly National Accounts Bulletin 1979/III and International Financial Statistics, November 1979 (rows 99a and 99b of the individual country pages). (c) Wholesale and retail prices. The latest estimates for all countries are given in International Financial Statistics (rows 63 and 64 respectively of the individual country pages). (d) Output per head in manufacturing. Data are available only for the United Kingdom and the latest estimates are given in Economic Trends, November 1979 (page 34). The qualifications regarding the use of the data for making comparisons between countries given in the previous answer still apply.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer if he will circulate in the Official Report a table showing for Germany, France, Italy, the United States
568Win the November 1979 issue, but there are no corresponding stock figures from which percentage increases can be calculated. To calculate and assess all the alternative correlation coefficients requested would incur disproportionate cost. Furthermore, because of the complexity of the relationship between monetary growth and inflation, simple correlations of this sort are unlikely to cast much light on it. I will write to the hon. Member about the correlation coefficient for the data supplied in my answer to him dated 14 November.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer whether he will circulate information in the Official Report revising and bringing up to date the information on the money supply, output, prices and productivity of various countries supplied on 27 November 1978 in columns 61 to 65.
§ Mr. BiffenThe basic information required to revise and update the figures supplied on 27 November 1978 to the then hon. Member for Southampton, Test can be obtained from the publications described below.
of America, Japan and the United Kingdom the percentage increase in the money supply, wholesale prices, retail prices, manufactured export prices and gross 569W domestic product between (a) 1960 and 1970 and (b) 1970 and 1978.
§ Mr. BiffenThe data required to calculate percentage changes in wholesale and retail prices and, apart from Italy, money supply are given inInternational Financial Statistics Yearbook, 1979.
Data for money supply for Italy for end-1978 are given in International Financial Statistics, November 1979. For the United Kingdom, the data that are published in the yearbook for money supply are based on the IMF definition (M2), as are the figures for other countries. Figures for sterling M3, the definition usually used in the United Kingdom, are not available for period before 1963. Unit value indices for manufactured goods exported are given in special table C of the UN Monthly Bulletin of Statistics, September 1979. Figures of gross domestic product at current and constant prices are given in National Accounts of OECD Countries 1952–1977. volume 1–main aggregates.
Apart from money supply and gross domestic product, the annual data have not been adjusted to standardised international definitions. Thus any inter-country comparisons should be made with caution. This is particularly important for the series on wholesale prices where definitions and methods of calculation vary widely from country to country.