Sterling Misalignment and British Trade Performance

Charles Bean

No 177, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In the first part of this paper I use a small macroeconomic model to examine the causes of the appreciation of sterling during 1979-81. Oil takes about half of the blame. Contractionary monetary policies alone do not seem sufficient to explain the rest, but when coupled with adverse supply-side developments they seem capable of explaining both the appreciation and the associated increase in unemployment. In the second part of the paper I examine the possibility that temporary fluctuations in the real exchange rate may have a permanent effect on British export performance. Using data from 1900 to the present I find evidence that is consistent with "hysteresis" effects on both the demand and supply side of the export market.

Keywords: Exchange Rates; Exports; Hysteresis; Monetary Policy; Oil Exports; United Kingdom (search for similar items in EconPapers)
Date: 1987-05
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=177 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Chapter: Sterling Misalignment and British Trade Performance (1988)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:177

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=177

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().