The Overvaluation of Sterling Since 1996

How the Policy makers Responded and Why

Datos Bibliográficos

ID9712682
AutoresDavid Cobham (0000-0001-8208-3716, Heriot-Watt University, autor de correspondencia)
Año2006
Volumen116
Número512
PáginasF185-F207
Fecha de publicación2006-06-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2006.01096.x
OpenAlexW2093745208
IdiomaEN
Citas recibidas2
Referencias citadas8

A large and sustained nominal appreciation in 1996-8 led to a serious and continuing overvaluation of sterling which has been associated with severe pressure on the manufacturing sector. The policy makers had difficulty in understanding past and forecasting future movements of sterling. They considered, but rejected, suggestions for foreign exchange market intervention and suggestions that interest rates should be set differently to reduce the overvaluation and relieve pressure on the tradable goods sector. One reason was that the exchange rate might react to such decisions in an erratic way. But if that is so the monetary framework needs to be revisited. Copyright 2006 Royal Economic Society

Economics · Exchange rate · Foreign exchange · Interest rate · International economics · Intervention (counseling · Macroeconomics · Monetary economics · Economic, financial, and policy analysis · Global Financial Crisis and Policies · Medicine · Monetary Policy and Economic Impact