§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer (1) what is his estimate of the amount by which the money supply would have to increase in terms of MO and M4 to accommodate an increase in the work force in employment to the 1990 level without an increase in the velocity of circulation;
(2) what was the velocity of circulation of MO and M4 for each year since 1979.
§ Mr. NelsonThere is no simple link between money supply and employment. In the long run, increases in money supply result in inflation, which is detrimental to activity and employment. Employment prospects are best increased by the achievement of sustained economic growth. This requires structural policies to improve the long run performance of the economy and a stable macro-economic environment with low inflation.
Table 6.2 is the Central Statistical Office monthly publication, "Economic Trends", shows the velocity of circulation for MO and M4.