Economic Impact of Margaret Thatcher Revisited

• Thesis title in Czech: Přehodnocení ekonomického dopadu Margaret Thatcherové
• Thesis title in English: Economic Impact of Margaret Thatcher Revisited
• Academic year of topic announcement: 2017/2018
• Thesis type: Bachelor's thesis
• Thesis language: angličtina
• Department: Institute of Economic Studies (23-IES)
• Supervisor: PhDr. Jaromír Baxa, Ph.D.
• Author: hidden - assigned by the advisor
• Date of registration: 29.05.2018
• Date of assignment: 29.05.2018
• Date and time of defence: 10.06.2019 09:00
• Venue of defence: Opletalova - Opletalova 26, O105, Opletalova - místn. č. 105
• Date of electronic submission: 10.05.2019
• Date of proceeded defence: 10.06.2019
• Opponents: PhDr. Simona Malovaná, Ph.D.

Guidelines

Research question and motivation
Let us once again analyze the time when British economic policies were the most trending, discussed and followed ones in the world. Was the economic policy of the three cabinets lead by Margaret Thatcher based on strong adherence to an ideology or was it the ability to learn from past mistakes that promoted growth and inspired its many followers? Did the restoration of economic growth appeared as a consequences of her policies or was it just a good luck?
This thesis will try to provide answers for these important questions through deep analysis of economic policy by M. Thatcher. In particular, it will compareher goals, the observed reality and counterfactual no-reforms scenario. I suppose additional interesting questions and answers will appear during the analysis.

Contribution
Research question and motivation
Margaret Thatcher is highly polarizing person even after almost 4 decades since her becoming first British woman Prime minister. However there is general consensus on her managing to significantly influence many aspects of public life not only in Britain forever. Some scholars even use the affected words as Thatcher revolution. The question remains, what was the impact of this revolution? We want to answer this question in exact sphere – the impact on GB economy.

Contribution
There are various empirical studies on Margaret Thatcher economic influence. They often contrast. Matthews, K. & P. Minford (1987) states that the improvement of British economic performance was caused significantly by Margaret Thatcher. On the other side Benati, L. (2008) provides other evidence that majority was depending on good luck. I shall provide challenging of both these results by usage of new method for comparative studies

Methodology
We will provide counterfactual study through application of recently developed method suitable for comparative studies – synthetic control method. This method developed by Abadie et al. (2003) later expanded (Abadie et al. (2010),(2015) consists of constructing synthetic treated unit of weighted average of different unexposed units. The synthetic unit simulates how would this unit act without occurrence of intervention of interest. The comparison of counterfactual and reality then provides us estimation of the intervention impact – Thatcher impact in our case.

References

Abadie, A. & J. Gardeazabal (2003): “The economic costs of conflict: A case study of the basque country.” The American Economic Review 93(1): pp. 113–132.
Abadie, A., A. Diamonda, & J. Hainmuellera (2010): “Synthetic control methods for comparative case studies: Estimating the effect of california’s tobacco control program.” Journal of the American Statistical Association 105(490): pp. 493–505.
Abadie, A., A. Diamonda, & J. Hainmuellera (2015): “Comparative politics and the synthetic control method.” American Journal of Political Science 59(2): pp. 495–510.
Matthews, K. & P. Minford (1987): \Mrs thatcher's economic policies 1979-87." European economic review 17(2): pp. 253{270.
Benati, L. (2008): “The ”great moderation” in the united kingdom.” Journal of Money, Credit and Banking 40(1): pp. 121–147.

Preliminary scope of work

Outline
We will provide the historical background – what politics proceeded Thatcher government and how she diverged from it. It is important to find specifically where and how these differences occurred. We will obviously give emphasis on economic policies. Then we will construct counterfactual model on GB economic performance. How would it perform under previous consensual politics. Then we can compare counterfactual to reality and conclude whether and how Thatcher government influenced the British economic performance.