IDEAS home Printed from https://ideas.repec.org/p/zbw/qucehw/202309.html
   My bibliography  Save this paper

Managed decline? Muddling through with the sterling (dis)agreements, 1968-74

Author

Listed:
  • De Bromhead, Alan
  • Jordan, David P.
  • Kennedy, Francis
  • Seddon, Jack

Abstract

How do policy makers manage the decline of an international currency? This paper examines British policy towards the pound sterling's international role in the years 1968-74. Using previously uncited government archival sources, we revisit the view that the 'sterling agreements' of 1968-74, bilateral contracts made between the UK and governments holding sterling, formed a successful paradigm shift in British policy, towards deliberately managing sterling's international 'retirement'. Our research indicates that there was no settled consensus or strategic direction to British policy in this period, a case of 'muddling through'. Indeed, when feasible options presented themselves, British officials sought to maximise, not reduce, international sterling holdings.

Suggested Citation

  • De Bromhead, Alan & Jordan, David P. & Kennedy, Francis & Seddon, Jack, 2023. "Managed decline? Muddling through with the sterling (dis)agreements, 1968-74," QUCEH Working Paper Series 23-09, Queen's University Belfast, Queen's University Centre for Economic History.
    • Handle: RePEc:zbw:qucehw:202309
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/276259/1/1859220320.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Papaioannou, Elias & Portes, Richard & Siourounis, Gregorios, 2006. "Optimal currency shares in international reserves: The impact of the euro and the prospects for the dollar," Journal of the Japanese and International Economies, Elsevier, vol. 20(4), pages 508-547, December.
    2. Robert N. McCauley & Catherine R. Schenk, 2015. "Reforming the International Monetary System in the 1970s and 2000s: Would a Special Drawing Right Substitution Account Have Worked?," International Finance, Wiley Blackwell, vol. 18(2), pages 187-206, June.
    3. Eichengreen, Barry & Flandreau, Marc, 2009. "The rise and fall of the dollar (or when did the dollar replace sterling as the leading reserve currency?)," European Review of Economic History, Cambridge University Press, vol. 13(3), pages 377-411, December.
    4. Barry Eichengreen & Arnaud Mehl & Livia Chitu, 2017. "How Global Currencies Work: Past, Present, and Future," Economics Books, Princeton University Press, edition 1, number 11124.
    5. Konstantinos Efstathiou & Francesco Papadia, 2018. "The euro as an international currency," Policy Contributions 28882, Bruegel.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alan de Bromhead & David Jordan & Francis Kennedy & Jack Seddon, 2023. "Sterling's farewell symphony: The end of the Sterling Area revisited," Economic History Review, Economic History Society, vol. 76(2), pages 415-444, May.
    2. Alain Naef, 2021. "Dirty float or clean intervention? The Bank of England in the foreign exchange market," European Review of Economic History, European Historical Economics Society, vol. 25(1), pages 180-201.
    3. Agnès Bénassy-Quéré, 2015. "The euro as an international currency," PSE-Ecole d'économie de Paris (Postprint) hal-01299083, HAL.
    4. Pierre-Olivier Gourinchas & Hélène Rey & Maxime Sauzet, 2019. "The International Monetary and Financial System," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 859-893, August.
    5. Gergely Hudecz & Edmund Moshammer & Alexander Raabe & Gong Cheng, 2021. "The euro in the world," Discussion Papers 16, European Stability Mechanism, revised 27 Oct 2021.
    6. Barry Eichengreen & Arnaud Mehl & Livia Chiţu & Thorsten Beck, 2019. "Mars or Mercury? The geopolitics of international currency choice," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 34(98), pages 315-363.
    7. Gylfi Zoega, 2020. "Monetary Hegemony and its Implications for Small, Open Economies," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 48(4), pages 431-446, December.
    8. Sergey Sinelnikov-Murylev & Alexandr Radygin (ed.), 2018. "Russian Economy in 2017. Trends and Outlooks. (Issue 39) In English," Books, Gaidar Institute for Economic Policy, edition 1, volume 39, number re39-2017-en, November.
    9. Barry Eichengreen & Chitu Livia & Arnaud Mehl, 2014. "Stability or upheaval? The currency composition of international reserves in the long run," Globalization Institute Working Papers 201, Federal Reserve Bank of Dallas.
    10. Stephen Quinn & William Roberds, 2016. "Death of a Reserve Currency," International Journal of Central Banking, International Journal of Central Banking, vol. 12(4), pages 63-103, December.
    11. Matteo Maggiori & Brent Neiman & Jesse Schreger, 2019. "The Rise of the Dollar and Fall of the Euro as International Currencies," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 521-526, May.
    12. Ethan Ilzetzki & Carmen M Reinhart & Kenneth S Rogoff, 2019. "Exchange Arrangements Entering the Twenty-First Century: Which Anchor will Hold?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 599-646.
    13. Ciner, Cetin, 2011. "Eurocurrency interest rate linkages: A frequency domain analysis," International Review of Economics & Finance, Elsevier, vol. 20(4), pages 498-505, October.
    14. Emmanuel Farhi & Matteo Maggiori, 2018. "A Model of the International Monetary System," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(1), pages 295-355.
    15. Francois John Nana, 2020. "Foreign official holdings of US treasuries, stock effect and the economy: a DSGE approach," The B.E. Journal of Macroeconomics, De Gruyter, vol. 20(1), pages 1-28, January.
    16. Monnet, Eric & Puy, Damien, 2020. "Do old habits die hard? Central banks and the Bretton Woods gold puzzle," Journal of International Economics, Elsevier, vol. 127(C).
    17. Chinn, Menzie D. & Ito, Hiro & McCauley, Robert N., 2022. "Do central banks rebalance their currency shares?," Journal of International Money and Finance, Elsevier, vol. 122(C).
    18. Yin-Wong Cheung, 2023. "A decade of RMB internationalisation," Economic and Political Studies, Taylor & Francis Journals, vol. 11(1), pages 47-74, January.
    19. Karim Pakravan, 2011. "Global financial architecture, global imbalances and the future of the dollar in a post‐crisis world," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 19(1), pages 18-32, February.
    20. Prasad, Eswar, 2014. "Global Implications of the Renminbi’s Ascendance," ADBI Working Papers 469, Asian Development Bank Institute.

    More about this item

    Keywords

    Sterling Area Agreements; international currency; sterling policy; disintegration;
    All these keywords.

    JEL classification:

    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:qucehw:202309. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/chqubuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.