Sterling Misalignment and British Trade Performance
In: Misalignment of Exchange Rates
AbstractIn 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.
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- Bean, Charles R, 1987. "Sterling Misalignment and British Trade Performance," CEPR Discussion Papers, C.E.P.R. Discussion Papers 177, C.E.P.R. Discussion Papers.
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- C.J.M. Kool & A. Lammertsma, 2004. "Inflation Persistence under Semi-Fixed Exchange Rate Regimes:The European Evidence 1974-1998," Working Papers, Utrecht School of Economics 04-04, Utrecht School of Economics.
- Richard Baldwin, 1988.
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- Juha Tervala, 2011.
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- Tervala, Juha, 2013. "Learning by devaluating: A supply-side effect of competitive devaluation," International Review of Economics & Finance, Elsevier, Elsevier, vol. 27(C), pages 275-290.
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- Gottfries, Nils, 2002. "Market Shares, Financial Constraints and Pricing Behaviour in the Export Market," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 69(276), pages 583-607, November.
- Gottfries, Nils, 1999. "Markets Shares, Financial Constraints, and Pricing Behavior in the Export Market," Working Paper Series, Uppsala University, Department of Economics 1999:15, Uppsala University, Department of Economics.
- Barry Eichengreen & Douglas A. Irwin, 1996.
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- Park, Mi-Hee & Koo, Won W., 2005. "Recent Development in Infrastructure and Its Impact on Agricultural and Non-agricultural Trade," 2005 Annual meeting, July 24-27, Providence, RI, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) 19525, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Clemens Kool & Alex Lammertsma, 2005. "Inflation Persistence under Semi-Fixed Exchange Rate Regimes: The European Evidence 1974Ã¢â‚¬â€œ1998," Open Economies Review, Springer, Springer, vol. 16(1), pages 51-76, January.
- Richard Baldwin, 1988. "Some Empirical Evidence on Hysteresis in Aggregate US Import Prices," NBER Working Papers 2483, National Bureau of Economic Research, Inc.
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