§ Mr. Austin Mitchellasked the Chancellor of the Exchequer if he will publish in the Official Report a table showing the increase in (a) the money supply, (b) manufacturing output per head, (c) manufacturing output and (d) gross domestic product; and if he will provide an estimate of the degree of correlation between the money supply and output, and between output and output per head.
§ Mr. LawsonTables showing all four of these variables are published regularly inEconomic Trends. Partly because of time lags and different definitions of some of the variables, there are no unique estimates of the two sets of correlations to 206W which the hon. Member refers. In the long run, however, there is a close relationship between monetary growth and inflation. In the short run, if inflationary expectations are high, a low rate of monetary growth will tend to exert a depressing effect on output, but the size of this effect depends heavily on the extent to which pay settlements exceed those which can be justified by improvements in productivity.