Impact of exchange rate and money supply on growth, inflation and interest rates in the UK

Bhattarai, Keshab

Abstract

Growth rates, inflation and interest rates are determined simultaneously in the UK. Depreciations of Sterling pounds contribute to the growth by enhancing international competitiveness. Inflation from the growth of money, depreciation of Sterling and higher interest rates, impacts adversely on it. London being a hub of the global financial market higher interest rates are persistent and coexist with greater liquidity of the financial system, making money supply non-neutral in the short run as in Desai and Weber (1988), Fisher and Whitley (2000), Mellis and Whittaker (2000), Wallis (1969, 1989) for the UK and Sargent (1976) and Fair (1993). Copyright © 2011 Inderscience Enterprises Ltd.

Citation

Bhattarai, K. (2011). Impact of exchange rate and money supply on growth, inflation and interest rates in the UK. International Journal of Monetary Economics and Finance, 4(4), 355-371. https://doi.org/10.1504/IJMEF.2011.043400

• Journal Article Type: Article
• Online Publication Date: Oct 27, 2011
• Publication Date: 2011
• Deposit Date: Feb 16, 2021
• Journal: International Journal of Monetary Economics and Finance
• Print ISSN: 1752-0479
• Electronic ISSN: 1752-0487
• Publisher: Inderscience
• Peer Reviewed: Peer Reviewed
• Volume: 4
• Issue: 4
• Pages: 355-371
• DOI: https://doi.org/10.1504/IJMEF.2011.043400
• Keywords: Simultaneous equation modelling; Macromodelling; Growth rates; Inflation; Interest rates; Exchange rates; Money supply; United Kingdom; UK
• Public URL: https://hull-repository.worktribe.com/output/3564531