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Sterling in crisis: 1964-1967

  • Michael D. Bordo
  • Ronald MacDonald
  • Michael J. Oliver

We provide the first econometric study of foreign exchange market intervention for the UK during the sterling crises from 1964-1967. We use daily data on spot and forward dollar/sterling exchange rates and reserve movements which allows a more precise description of the loss of credibility during four currency crises. Reserve losses are consistent with exchange rate crises. External assistance given to sterling throughout this period shored up the reserves and allowed the sterling peg to be maintained.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14657.

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Date of creation: Jan 2009
Date of revision:
Publication status: published as Bordo, Michael D. & Macdonald, Ronald & Oliver, Michael J., 2009. "Sterling in crisis, 1964?1967," European Review of Economic History, Cambridge University Press, vol. 13(03), pages 437-459, December.
Handle: RePEc:nbr:nberwo:14657
Note: ME
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  1. Barry Eichengreen & Andrew K. Rose & Charles Wyplosz, 1995. "Speculative attacks on pegged exchange rates: an empirical exploration with special reference to the European Monetary System," Working Papers in Applied Economic Theory 95-04, Federal Reserve Bank of San Francisco.
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  10. Grubel, Herbert G, 1971. "The Demand for International Reserves: A Critical Review of the Literature," Journal of Economic Literature, American Economic Association, vol. 9(4), pages 1148-66, December.
  11. Francesco Caramazza, 1993. "French-German Interest Rate Differentials and Time-Varying Realignment Risk," IMF Working Papers 93/1, International Monetary Fund.
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  13. Paul Hallwood, C. & MacDonald, Ronald & Marsh, Ian W., 2000. "Realignment expectations and the US dollar, 1890-1897: Was there a 'Peso problem'?," Journal of Monetary Economics, Elsevier, vol. 46(3), pages 605-620, December.
  14. repec:pal:imfstp:v:40:y:1993:i:3:p:567-583 is not listed on IDEAS
  15. Michael D. Bordo, 1993. "The Bretton Woods International Monetary System: A Historical Overview," NBER Chapters, in: A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform, pages 3-108 National Bureau of Economic Research, Inc.
  16. N/A, 1964. "The Economic Situation," National Institute Economic Review, National Institute of Economic and Social Research, vol. 30(1), pages 4-29, November.
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  18. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-25, August.
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