Monetary Policy in the UK

Posted: 16 Jun 2008

See all articles by Alvaro Angeriz

Alvaro Angeriz

University of Cambridge - Department of Applied Economics

Philip Arestis

University of Cambridge - Department of Land Economy; Universidad del País Vasco (UPV/EHU)

Date Written: November 2007

Abstract

The authors argue that the institutional dimension of the Bank of England monetary policy and the role the UK HM Treasury assumes in this framework are both firmly based on the New Consensus in Macroeconomics (NCM). This is also the theoretical framework upon which the inflation targeting element of monetary policy is firmly based. This paper discusses these aspects of UK monetary policy, and then assesses the policy that has been pursued since 1997 (with some reference made to the period between 1992 and 1997 when a version of the framework was introduced). The strategy has been successful in terms of keeping UK inflation rates within the targets set by HM Treasury. However, a number of problematic issues are highlighted and discussed.

Keywords: Monetary policy, Tight monetary policy, Exchange rate policy, Price stability, Intervention analysis, MPC membership

JEL Classification: E31, E43, E52, E58

Suggested Citation

Angeriz, Alvaro and Arestis, Philip, Monetary Policy in the UK (November 2007). Cambridge Journal of Economics, Vol. 31, Issue 6, pp. 863-884, 2007. Available at SSRN: https://ssrn.com/abstract=1146017 or http://dx.doi.org/10.1093/cje/bem014

Alvaro Angeriz (Contact Author)

University of Cambridge - Department of Applied Economics ( email )

Sidgwick Avenue
Cambridge, CB3 9DE
United Kingdom

Philip Arestis

University of Cambridge - Department of Land Economy ( email )

19 Silver Street
Cambridge, CB3 9EP
United Kingdom

Universidad del País Vasco (UPV/EHU)

Barrio Sarriena s/n
Leioa, Bizkaia 48940
Spain

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