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A rational expectations model estimated for the UK is used to simulate macroeconomic policy under fixed and floating exchange rates. Under fixed rates inflation and interest rates are effectively set internationally; monetary policy only affects the reserves even in the short run and cyclical variations in fiscal policy are able to influence output in a fairly standard manner. Under floating rates, fiscal and monetary policy have rapid impacts on inflation and interest rates producing unfamiliar financial effects on expenditure which eliminate or reserve the conventional output multipliers. Stabilisation policy is still feasible but has to take account of these effects.

This article considers the impact of minimum wage legislation on wages, employment and gross domestic product. Using the Liverpool quarterly model of the UK to calculate the total effects in the economy, the authors suggest that unemployment would increase along with the real wages of low paid workers.

I have given this review article its provocative title, not because the book with which it is associated is bad or should be buried. On the contrary, the book, as one would expect from the authors, is an extremely intelligent and well‐argued application of available techniques to the problem of designing demand management policies for the British economy. I have so entitled my piece because the book brought home to me, through its clarity and honest fullness of detail, just how impractical, undesirable and unlikely to appeal even to the British politicians of the centre‐left to whom they are offered, these policies are. Demand management has been a blind alley, and so, indeed, has the incomes policy which is part of the formula recommended in this book; the solutions to our problems lie along other lines and modes of thought.

The size and growth of the so‐called “black economy” has provided a great deal of discussion in recent years. Typically the discussion has been confined to editorials and articles in leading newspapers, but of late politicians, civil servants and even academics, on both sides of the Atlantic have commented on the rise of the black economy. Despite this volume of comment, very few serious attempts have been made actually to measure the size of this unobserved sector for the UK.