The National Institute

David's new position presented him with challenges in many different areas. The first was the need to maintain, support and keep the NIESR's economic forecasting model. This meant providing accurate quarterly and annual fore­casts for the UK for a myriad of different variables, not simply GDP, employ­ment, incomes, prices, wages and interest rates, but also the budget and the balance of payments, including the levels of exports and imports, as well as the exchange rates with many other currencies.

The second was the supervision of a large number of studies about particu­lar regions and industries in different parts of the country, the nature of struc­tural unemployment and differing regional growth rates. The third challenge was to clarify the need for government policy, in particular to ask how to maintain full employment and wage and price stability in a changing world in which prices tended to keep rising. David's answer was some form of incomes policy. The relationship between those economists who stressed demand

management as the main full employment policy tool and those who stressed monetary goals to contain inflation was continually strained. At issue were the economic facts themselves as they described how the economy worked, not only the different political interests at work in forming official policy.

The fourth challenge was to clarify the balance of payments issues associ­ated with making an economic policy which would sustain full employment. The last issue, which he encountered immediately, was the issue of funding to support the work of the Institute itself. This involved constant communica­tion with and presentations to different sources of funding: the government, in particular the Treasury, large American foundations like Ford and Rockefeller, and many smaller private business sources.

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