Is the almost twenty per cent depreciation in the sterling effective exchange rate index a significant shock absorber for the British economy? MPC member Ben Broadbent (formerly of Goldman Sachs) clearly thinks so as quoted in this BBC news article.
I held a revision webinar on Revision Webinar: External Shocks and Macro Policies which you can find here and I referenced floating exchange rates as a useful adjustment device for countries exposed to both demand and supply side shock events.
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