'How do you manage an economy with long-standing rock-bottom interest rates, a financial system awash with liquidity, and uncomfortably high public sector debt and deficit ratios? While that might sound like a current problem, it was actually much worse in the early 1950s, as Bill Allen's detailed and careful history of British monetary policy in the 1950s makes clear. The answers then involved quite a lot of repression, the first persistent, non-war-related, rise in inflation, and some hotly debated upwards spikes in interest rates, largely triggered by external weakness. Although the Bank of England was subservient to Whitehall, personalities mattered, then as now; Bill Allen records how Cobbold, despite a quite weak institutional position, managed to lead the debate on domestic monetary policy, though his stance on transparency would now be regarded as antediluvian. Meticulous history and a good read.' Charles Goodhart, Emeritus Professor, London School of Economics, Member of Bank of England Monetary Policy Committee, 1997 - 2000. 'A timely and fascinating account of Britain's emergence from the previous era of cheap money and analysis of the accompanying dark arts of financial repression. Allen has a commanding grasp of monetary economics and the era.' Professor Richard Roberts, Director of the Institute of Contemporary British History, King's College London 'This is a brilliant, extended, monetary essay on the 1950s. By the end of the decade monetary policy was run out of Downing Street, directed by misplaced objectives and Keynesian dogma, with pernicious effects on inflation and the fabric of society. A lesson for today will strike the reader: monetary policy should be directed at price stability and not subordinated to debt management, however tempting that may be to politicians confronting a high debt stock.' Andrew Tyrie, MP, Chairman of the House of Commons Treasury Committee and the Parliamentary Commission on Banking Standards. 'Allen has written a fascinating and coherent account of British monetary policy in the 1950s... [Yet] Allen's book is not just skilful history: it offers a major warning to current policy-makers looking for what may happen after the low interest rate environment. Is the future likely to be a replay of the past, in which economic openness (capital movements) and fiscal constraints combine to limit the room for policy maneuver? For a long time we have been obsessed by the policy mistakes of the 1930s; Allen draws our attention to the policy traps of the 1950s.' Harold James, Princeton University in Central Banking - read the full review here: http://www.centralbanking.com/type/review/category/central-banks/monetary-policy
