Contradictory
Sir: Mr Davenport's article of 14 January was as always most perceptive and gives a timely warning about the dangers inherent in the current euphoria. In particular, the figure of £2,000 million apparently agreed by the economists consulted by the Bank is ridiculous since it represents a comparison between schools of thought so incompatible as to make the very idea of an agreed figure inherently laughable.
On one point, however, Mr Davenport could be a little more strong. He presents as opposites Keynesian expansionists and those in favour of an incomes policy. Cambridge Keynesian economics has always taught that demand management and an incomes policy are part of the same economic strategy. Chicago teaches that monetary policy makes both redundant. Vaizey House of Lords, Westminster, London SW1
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