This article introduces the three contributions to the Feature, which address issues raised by the sterling appreciation of 1996-97 and the subsequent prolonged overvaluation. Cobham discusses the MPC's understanding of exchange rate changes and examines policy makers' responses to the proposal...

Evidence is presented on the extent to which the possibility for the exchange rate to vary has been useful or unhelpful for UK monetary policy over the last two decades. ‘Large’ exchange rate changes and ‘large’ misalignments are identified, and the thinking and actions...

Alternative measures of the UK output gap are considered for 1984-2007. The real-time series is strongly affected by the rolling-time estimation of the trend, and produces a picture of the business cycle which is not consistent with contemporary perceptions of the large fluctuations of the late...

If actual unemployment affects the NAIRU through a hysterisis effect, the disinflation involved in reducing a country's inflation rate to that of its future partners in a monetary union could produce a long term cost to monetary union in the form of a lasting rise in the NAIRU. This note sets...

Data from a unique monetary 'experiment' conducted in the UK during the period 1994-97 are used to investigate the cost of political intervention in monetary policy. The paper finds that the difference between government bond yields in Germany (but not the US) and the UK was systematically...

In estimating a gravity model it is essential to analyse not just bilateral trade resistance, the barriers to trade between a pair of countries, but also multilateral trade resistance (MTR), the barriers to trade that each country faces with all its trading partners. Without correctly modelling...

Several different definitions of Domestic Credit Expansion (DCE) in the UK have been used either for official or for academic purposes, yet apart from an early paper by Art is and Nobay (1969) there has been little serious discussion of the issues involved. This expository note is intended to...

How would Palestine organise itself as a state economically? A respected, international group of academics have come together under the editorship of Cobham and Kanafani to analyze and attempt to answer this difficult question

This volume assesses the current state of play for Middle East and North African countries, in the light of wider work on inflation targeting, and provides lessons from the evolution of monetary policy in Europe