Whither now?
DOI:
https://doi.org/10.13133/2037-3643/10583Keywords:
Market fluctuations, Economic news, Volatility, Foreign exchange marketsAbstract
The author is one of the UK's eminent monetary economists and a member of the UK's Monetary Policy Committee. After summarising his early academic career, he discusses his time at the Bank of England and the formation of UK monetary policy. This leads on to a survey of his later experiences in returning to academia and his analysis of foreign exchange markets and central bank autonomy. The movements of foreign exchange markets have been thought to react upon the arrival of news concerning changes in monetary policy. However, close examination of the US forex market does not show any significant fluctuations in reaction to particular news disclosures. Economic news with pre-announced release dates have been proven to produce jumps in volatility within minutes of disclosure. The use of high frequency data at given intervals has been shown to produce price spikes and subsidence after a few minutes.
JEL Codes: E02, F31
References
BANK OF ENGLAND (1969), "The operation of monetary policy since the Radcliffe Report", Bank of England Quarterly Bulletin, 9 (4), pp. 448-60.
BANK OF ENGLAND (1969), "Domestic credit expansion", Bank of England Quarterly Bulletin, 9 (3), pp. 363-82.
BANK OF ENGLAND (1971), Competition and Credit Control, May, London.
BANK OF ENGLAND (1981), "Monetary control - Provisions", Bank of England Quarterly Bulletin, 21(3), pp. 347-50.
BANK OF ENGLAND (1984), The Development and Operation of Monetary Policy, 1960-1983, Clarendon Press, Oxford.
BIRMINGHAM, S. (1968), Our Crowd. The Great Jewish Families of New York, Longman, London.
CAIRNCROSS, A. (1996), Managing the British Economy in the 1960s: A Treasury Perspective, Macmillan, London.
CROCKETT, A.D. (1970), "Timing relationships between movements of monetary and national income variables", Bank of England Quarterly Bulletin, 10 (4), pp. 459- 72.
CURCIO, R. and C.A.E. GOODHART (1992), "When support/resistance levels are broken, can profits be made?", Financial Markets Group Discussion Paper, no. 142, July.
CURCIO, R. and C.A.E. GOODHART, D. GUILLAUME and R. PAYNE (1997), "Do technical trading rules generate profits? Conclusions from the intra-day foreign exchange market", International Journal of Finance and Economics, 2(4), pp. 267-80.
CURCIO, R. and C.A.E. GOODHART (1993), "Chartism: a controlled experiment", Journal of International Securities Markets, 7, Autumn, pp. 173-86.
DEMOS, A.A. and C.A.E. GOODHART (1996), "The interaction between the frequency of market quotations, spread and volatility in the foreign exchange mar-ket", Applied Economics, 28, pp. 377-86.
DICTIONARY OF NATIONAL BIOGRAPHY (1986), Oxford University Press, Oxford.
FFORDE, J.S. (1954), The Federal Reserve System, 1945-49, Clarendon Press, Oxford.
FINANCIAL MARKETS GROUP (1987), Annual Report, London School of Eco-nomics, London.
FLADE, R. (1996), The Lehmans: From Rimpar to the New World, Konigshausen & Neuman, Wiirzburg.
FOOT, M.D.K.W., C.A.E GOODHART and A.C. HOTSON (1979), "Monetary base control", Bank of England Quarterly Bulletin, 19 (2), pp. 149-59.
FRANKEL, J.A., G. GALLI and A. GIOVANNINI (1996), The Microstructure of Foreign Exchange Markets, for the NBER, University of Chicago Press, Chicago.
FRIEDMAN, M. and A.J. SCHWARTZ (1963), A Monetary History of the United States, 1867-1960, NBER, Princeton University Press, Princeton.
GLASNER, D., ed. (1997), Business Cycles and Depressions: An Encyclopedia, Garland Publishing Inc., New York.
GOLDFELD, S.M. (1973), "The demand for money revisited", Brookings Papers on Economic Activity, no. 3, pp. 577-638.
GOODHART, A.L. (1920), Poland and the Minority Races, George Allen & Unwin Ltd, London.
GOODHART, C.A.E. (1962), "National banking system reactions to seasonal variations, 1900-1913", 2 vols, PhD Thesis, Harvard University, Cambridge, Mass.
GOODHART, C.A.E. (1964), "Review of a monetary history of the United States, 1867-1960, by M. Friedman and A. Schwartz", Economica, XXXI (123), pp. 314- 18.
GOODHART, C.A.E. (1965), "Profit on national bank notes, 1900-1913", Journal of Political Economy, LXXIII (5), pp. 516-22.
GOODHART, C.A.E. (1969), The New York Money Market and the Finance of Trade, 1900-1913, Harvard Economic Studies, vol. 132, Harvard University Press, Cambridge, Mass.
GOODHART, C.A.E. (1972), The Business of Banking, 1891-1914, Weidenfeld and Nicolson, London.
GOODHART, C.A.E. (1973), "Monetary policy in the United Kingdom", in K. Holbik ed., Monetary Policy in Twelve Industrial Countries, chapter 12, Federal Reserve Bank of Boston, Boston.
GOODHART, C.A.E. (1975), Money, Information and Uncertainty, revised 2nd edition 1989, Macmillan, London.
GOODHART, C.A.E. (1984), "The problems of monetary management: the UK experience", in Monetary Theory and Practice, chapter III, Macmillan, London.
GOODHART, C.A.E. (1988), "The foreign exchange market: a random walk with a dragging anchor", Economica, 55 (220), pp. 437-60.
GOODHART, C.A.E. (1988), "The conduct of monetary policy", Economic Journal, 99 (396), pp. 293-346.
GOODHART, C.A.E. (1989), "News' and the foreign exchange market", Manchester Statistical Society, Pamphlet, October 17.
GOODHART, C.A.E. (1989), "News' and the foreign exchange market", Financial Markets Group Discussion Paper, no. 71, January 1990.
GOODHART, C.A.E. (1994), "What should central banks do? What should be their macroeconomic objectives and operations?", Economic Journal, 104 (427), pp. 1424-36.
GOODHART, C.A.E. (1995), "Money supply control: base or interest rates", in K.D. Hoover and S.M. Sheffrin eds, Monetarism and the Methodology of Economics, chapter 7, Edward Elgar, Aldershot.
GOODHART, C.A.E. (1995), The Central Bank and the Financial System, Macmillan, London.
GOODHART, C.A.E. (1997), "Hong Kong financial crisis (1983)", in D. Glasner ed., Business Cycles and Depressions: An Encyclopedia, Garland Publishing Inc., New York.
GOODHART, C.A.E. ed. (1998), The Emerging Framework of Financial Regulation, FMG Papers on financial regulation, Central Banking Publications Ltd, Lon-don, forthcoming.
GOODHART, C.A.E. and R.J. BHANSALI (1970), "Political economy", Political Studies, XVIII (1), pp. 43-106.
GOODHART, C.A.E. and A.D. CROCKETT (1970), "The importance of money", Bank of England Quarterly Bulletin, 10 (2), pp. 159-98.
GOODHART, C.A.E. and R. CURCIO (1991), "The clustering of bid/ask prices and the spread in the foreign exchange market", Financial Markets Group Discussion Pa-per, no. 110, January.
GOODHART, C.A.E. and A.A. DEMOS (1990), "Reuters screen images of the foreign exchange market; the Deutschemark/dollar spot rate", The Journal of Interna-tional Securities Markets, 4, Winter, pp. 333-57.
GOODHART, C.A.E. and A.A. DEMOS (1991), "Reuters screen images of the foreign exchange markets: the yen/dollar and the sterling/dollar spot market", The Journal of International Securities Markets, 5, Spring, pp. 35-64.
GOODHART, C.A.E. and L. FIGLIUOLI (1991), "Every minute counts in financial markets", Journal of International Money and Finance, 10(1), pp. 23-52.
GOODHART, C.A.E. and L. FIGLIUOLI (1992), "The geographical location of the foreign exchange market: a test on an 'islands' hypothesis", Journal of International and Comparative Economics, (JOICE), 1(1), pp. 13-28.
GOODHART, C.A.E. and M. GIUGALE (1989), "Some evidence on daily trading in the London foreign exchange market", The Journal of International Securities Mar-kets, Summer, pp. 137-46.
GOODHART, C.A.E. and M. GIUGALE (1993), "From hour to hour in the foreign exchange market", Manchester School Journal, LXI (1), pp. 1-34.
GOODHART, C.A.E., S.G. HALL, S.G.B. HENRY and B. PESARAN (1993), "News effects in a high frequency model of the sterling-dollar exchange rate", Journal of Applied Econometrics, 8 (1), pp. 1-13.
GOODHART, C.A.E., P. HARTMANN, D.T. LLEWELLYN, L. ROJAS-SUAREZ and S. WEISBROD (1998), Financial Regulation: Why, How and Where Now?, Rout-ledge, London, forthcoming.
GOODHART, C.A.E. and T. HESSE (1993), "Central bank forex intervention assessed in continuous time", Journal of International Money and Finance, 12 (9), pp. 368- 89.
GOODHART, C.A.E. and H. HUANG (1996), "What are the central bank's and the private sector's objectives", Financial Markets Group, mimeo, forthcoming later in published form.
GOODHART, C.A.E., T. ITO and R. PAYNE (1996), "One day in June 1993: a study of the working of the Reuters 2000-2 electronic foreign exchange trading system", in J.A. Frankel, G. Galli and A. Giovannini eds, The Microstructure of Foreign Exchange Markets, chapter 4, University of Chicago Press; also published as NBER Technical Working Paper, no. 179, April 1995.
GOODHART, C.A.E., P.C. McMAHON and Y.L. NGAMA (1992), "Does the forward premium/discount help to predict the future change in the exchange rate?", Scottish Journal of Political Economy, 39 (2), pp. 129-40.
GOODHART, C.A.E., P.C. McMAHON and Y.L. NGAMA (1993), "Testing for unit roots with very high frequency spot exchange rate data", Journal of Macroeco-nomics, 15 (3), pp. 423-38.
GOODHART, C.A.E., P.C. McMAHON and Y.L. NGAMA (1997), "Why does the spot-forward discount fail to predict changes in future spot prices", International Journal of Financial Economics, 2 (2), pp. 121-30.
GOODHART, C.A.E. and M. O'HARA (1997), "High frequency data in financial markets: issues and applications", Journal of Empirical Finance, 4 (2/3), pp. 73-114.
GOODHART, C.A.E. and R. PAYNE (1996b), "Microstructural dynamics in a foreign exchange electronic broking system", Journal of International Money and Fi-nance, 15 (6), pp. 829-52.
GOODHART, C.A.E. and M.P. TAYLOR (1992), "Why don't individuals speculate in forward foreign exchange?", Scottish Journal of Political Economy, 39 (1), pp. 1- 13.
HARCOURT, G.C. (1972), Some Cambridge Controversies in the Theory of Capital, Cambridge University Press, Cambridge.
HOLBIK, K. (1973), Monetary Policy in Twelve Industrial Countries, Federal Reserve Bank of Boston, Boston.
LAWSON, N. (1981), "Thatcherism in practice. A progress report", Speech to the Zurich Society of Economics, 14th January, H.M. Treasury Press Release, London.
LAWSON, N. (1992), The View from No. 11, Memoirs of a Tory Radical, Corgi Books, London.
NEVINS, A. (1963), Herbert H. Lehman and his Era, Scribners, New York.
NIEHANS, J. (1981), "The appreciation of sterling - Causes, effects, policies", Money Study Group, Discussion Paper, mimeo, February.
PAYNE, R. (1996), "Announcement effects and seasonality in the intra-day foreign exchange market", Financial Markets Group Discussion Paper, no. 238, London School of Economics.
PAYNE, R. (1996), "Information transmission in inter-dealer foreign exchange transactions", Working Paper, Financial Markets Group London School of Econom-ics.
RICHARDSON, G. (1978), "Reflections on the conduct of monetary policy", Bank of England Quarterly Bulletin, 18 (1), pp. 51-58.
SHACKLE, G.L.S. (1949), Expectations in Economics, Cambridge University Press, Cambridge.
SRAFFA, P. (1960), Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory, Cambridge University Press, Cambridge.
SVENSSON, L. (1997), "Optimal inflation targets, 'conservative' central banks, and linear inflation contracts", American Economic Review, 87 (1), pp. 98-114.
SVENSSON, L. (1997), "Inflation forecast targeting: implementing and monitoring inflation targets", European Economic Review, 41(6), pp. 111-46.
THATCHER, M. (1993), The Downing Street Years, Harper Collins, London.
TREASURY and CIVIL SERVICE COMMITTEE (1981), Monetary Policy: Report, HMSO, London.
TREASURY, HER MAJESTY'S (1980), Financial Statement and Budget Report, incorporating the Medium Term Financial Strategy, Her Majesty's Stationery Office (HMSO), London.
WALSH, C.E. (1995), "Optimal contracts for central bankers", American Economic Review, 85 (1), pp. 150-67.
WALTERS, A. (1986), Britain's Economic Renaissance: Margaret Thatcher's Reforms, 1979-1984, Oxford University Press, Oxford.
Downloads
Published
How to Cite
Issue
Section
License
