Exchange Market Pressure on the Pound-Dollar Exchange Rate: 1925-1931

Paul Hallwood and Ian Marsh ()

No 2003-23, Working papers from University of Connecticut, Department of Economics

Abstract: An investigation of exchange market pressure against the pound sterling during the inter-war period. The main findings are that a) the behavior of UK fundamentals relative to those of the USA help to explain exchange market pressure against the pound; b) during the run up to devaluation in September 1931 the monetary authorities in the UK were acting to reduce domestic credit; but that c) additional pressure was brought against the pound from speculative sources. These findings relate to current thinking on the choice of exchange rate regime as even well behaved fundamentals may not be sufficient to sustain a currency on its peg.

Keywords: Bank of England; exchange market pressure; gold standard; devaluation; pegged exchange rates; realignment expectations. (search for similar items in EconPapers)
JEL-codes: C53 E58 F31 F33 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2003-08
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Journal Article: Exchange market pressure on the pound-dollar exchange rate: 1925-1931 (2004)
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