02119cas a2200241 a 4500 AALejournalIMF010484 230101c9999 xx r poo 0 0eng d 15.00 USD 9781451972702 1020-7635 BD-DhAAL BD-DhAAL International Monetary Fund. Research Dept. IMF Staff papers : Volume 29 No. 3. Washington, D.C. : International Monetary Fund, 1982. 1 online resource (140 pages) IMF Staff Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the effects of the emergence of the United Kingdom as a major oil producer, together with the pursuit of firm financial policies as part of an anti-inflation strategy, has had on the UK economy and, in particular, on the real exchange rate of the pound sterling, which appreciated by 45 percent between 1977 and late 1981. The build-up of North Sea oil production and the rise in the real price of oil have led to a significant change in the structure of the UK economy. A small dynamic macro model of the United Kingdom has been constructed to assess the quantitative importance of North Sea oil production on the economy as well as the main effects of the anti-inflation strategy. The results indicate that both direct and indirect effects of oil production on the real exchange rate and, consequently, on the manufacturing sector are large. The results also indicate that a policy of financial restraint would be successful in reducing inflation, although its costs in the short term would be high, largely because inflation expectations do not appear to adjust rapidly. Mode of access: Internet IMF Staff Papers; IMF Staff Papers ; No. 1982/003 Full text available on IMF http://elibrary.imf.org/view/journals/024/1982/003/024.1982.issue-003-en.xml IMF e-Library