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Sterling and stability.(Letters)

Quadrant

| October 01, 2003 | Dorrance, Graeme S. | COPYRIGHT 2003 Quadrant Magazine Company, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

SIR: While one may agree with everything in Professor Flint's article (September 2003), he might have included another element in the "Anglosphere" that contributed to the progress of Australia: the price stability implicit in the nineteenth-century sterling area system.

Professor Flint refers to Argentina "slipping from the First World to the Third ... in two generations". It is little more than two generations since the Central Bank of Argentina substituted a multiple fluctuating exchange rate system for the fixed rate tied to sterling. As recent Argentine experience shows, it was not the fixed peg to a currency, but the policy that made that rate sustainable that was the base of the sterling area's progress. In the nineteenth ...

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