1 - Preparing for Stage II
Published online by Cambridge University Press: 05 November 2012
Summary
With 1944 the problems of overseas war finance became even more closely intertwined with those of the post-war, transitional period. Keynes's activities from the very beginning of the year bring this interdependence out most clearly, for the turn of the year saw him preparing a memorandum on the transition. He passed an early draft to Sir Richard Hopkins on 7 January and, after discussing it with Hopkins on 9 January, he revised it slightly before circulating it to the Treasury and the Bank on 11 January.
NOTES ON EXTERNAL FINANCE IN THE POST-JAPANESE-ARMISTICE TRANSITIONAL PERIOD
The Magnitude of the U.K. Deficit
Some months ago the Economic Section estimated the aggregate external deficit of the U.K. in the first two post-war years at £575 million. This needs revision in the light of later facts, but such a revision (if the basic assumptions remain unchanged) may not involve more than (say)±£100 million.
It is based in some respects on optimistic, in other respects on pessimistic, assumptions. In particular:-
(i) It assumes, especially in the second year, a significant relaxation of war-time restrictions on consumption. An alternative estimate on the basis of minimum civilian consumption reduces the two-year deficit to £75 million. The programme which the Ministry of Food is contemplating would tend to produce, I think, the higher, rather than the lower, figure of deficit.
- Type
- Chapter
- Information
- The Collected Writings of John Maynard Keynes , pp. 1 - 113Publisher: Royal Economic SocietyPrint publication year: 1978