British management of the sterling area, 1950-1958
The contents of this thesis examine British management of the sterling area between 1950 and 1958, covering the period between the devaluation of sterling in 1949 and the establishment of sterling convertibility in 1958. The main body of the thesis is comprised of five chapters which analyze different aspects of the sterling area system during this period. Long term lending from the UK to the overseas sterling area is examined with the conclusion that these capital flows were not a major drain on the British economy. The mechanics of movements in British short term liabilities to the rest of the sterling area are described and their effects on the British foreign exchange reserves is found to be positive or neutral for most of the period although the basis for this erodes as the decade draws to a close. The trade pattern of the sterling area members is analyzed and the changing policies to coordinate the trade of the area are described. The possibility that the existence of the sterling area inhibited the freedom of policy choices faced by the British authorities is explored with the conclusion that the major opportunities for a new direction in British external economic policy were abandoned for reasons other than the sterling area system. Finally, some possible alternatives to the sterling area system are analyzed and the thesis concludes that these were not plausible alternatives given the historical context in which economic policy decisions were made. The general conclusion of the thesis is that the sterling area system as it functioned in the 1950s was not the major burden or destabilizing factor for the British economy that contemporary observers and some current research have suggested.