In 1981 almost the entire economics profession 364 academic economists including many professors at leading universities signed a letter to The Times in response to Geoffrey Howes budget arguing that the governments economic policy was fatally flawed, had no basis in economic theory and should be abandoned in favour of alternative policies.
A new report by the Institute of Economic Affairs* provides evidence to suggest that the 364 economists were all wrong. Contrary to their predictions, almost immediately after the budget the economy began to grow, inflation fell and eventually employment grew. It is argued that the budget marked a turning point in British economic policy as financial credibility was restored through restraints on public spending and a significant increase in taxes.
The IEA publication contains commentaries on the budget by lead