The Overvaluation of Sterling Since 1996

How the Policy makers Responded and Why

Dados Bibliográficos

ID9712682
AutoresDavid Cobham (0000-0001-8208-3716, Heriot-Watt University, autor correspondente)
Ano2006
Volume116
Fascículo512
PáginasF185-F207
Data de publicação2006-06-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2006.01096.x
OpenAlexW2093745208
IdiomaEN
Citações recebidas2
Referências 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