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Dollar‐Deutschemark Polarisation: Comparing The Pound And Franc

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  • James Forder
  • Stan Hurn

Abstract

The extent to which movements in the sterling and franc bilateral exchange rates are associated with changes in the dollar‐deutschemark exchange rate is measured. In the case of the pound we find, in contrast to the impression that might be gained from previous studies, that its linkage to the dollar has been, since the late 1990s, as high as it was in the late 1970s. In the case of the franc, we find that it has for some time been a powerfully deutschemark‐linked currency. This calls into question the view that there has been significant ‘dollar‐deutschemark polarity’ with respect to the franc in the recent past. We suggest that policymaker guidance and market rules of thumb may partially explain the developments we observe.

Suggested Citation

  • James Forder & Stan Hurn, 2003. "Dollar‐Deutschemark Polarisation: Comparing The Pound And Franc," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(3), pages 217-231, August.
    • Handle: RePEc:bla:scotjp:v:50:y:2003:i:3:p:217-231
    DOI: 10.1111/1467-9485.5003007
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    References listed on IDEAS

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    1. Haldane, A G & Hall, S G, 1991. "Sterling's Relationship with the Dollar and the Deutschemark: 1976-89," Economic Journal, Royal Economic Society, vol. 101(406), pages 436-443, May.
    2. Hall, S G & Robertson, D & Wickens, M R, 1992. "Measuring Convergence of the EC Economies," The Manchester School of Economic & Social Studies, University of Manchester, vol. 60(0), pages 99-111, Supplemen.
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    Cited by:

    1. Eichengreen, Barry & Naef, Alain, 2022. "Imported or home grown? The 1992–3 EMS crisis," Journal of International Economics, Elsevier, vol. 138(C).

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