Economic Impact of Margaret Thatcher Revisited
|Author:||Bc. Jakub Stuchlík|
|Year:||2019 - summer|
|Leaders:|| PhDr. Jaromír Baxa Ph.D.
|Work type:|| Bachelors
|Awards and prizes:||Nomination Deloitte Outstanding Thesis Award|
|Abstract:||Forty years after Margaret Thatcher became the first woman prime minister of the
UK, her past actions and reforms remain highly polarizing and influential.
Nevertheless, there is general agreement that her government was a game-changing
one in many aspects. In this thesis we test whether and to what extent her
deconstruction of the Post-war consensus affected the UK’s economic performance.
We apply the synthetic control method in order to observe the overall economic
impact of Thatcher’s policies. We find significant evidence that M. Thatcher
exploited the output-inflation trade-off, and the decrease of inflation was very much
at the costs of a significant increase of unemployment. We have calculated that in
case of continuation of Post-war consensus policies the inflation would be on average
approximately 2.2% higher and unemployment 2.8% lower in time period 1980-1990.