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Originally used to characterise the tight money/high interest rate policy adopted at the time of already tight fiscal policy during the first two Thatcher governments in the UK in the 1980s.

Coined by William Keegan of The Observer newspaper the phrase was taken up enthusiastically by Dennis Healey, the Shadow Chancellor of the Exchequer.


The term was re-used in the early 2000s by Gerard Baker of the Financial Times for the (then US) policy of raising interest rates even at a time of high unemployment.

Note: originally not hyphenated, it is now frequently spelt sado-monetarism, even by William Keegan.

See also