Sterling in Decline Again: The 1931 and 1992 Crises Compared

The parallels between the 1931, 1949, 1967 and 1992 sterling crises have not gone unremarkecl upon. But the 1992 episode, understandably in light of its recent pedigree, has not been the subject of the same kind of comparative analysis as the United Kingdom's three earlier 20th century balance-of-payments crisis. A systematic comparison can highlight features common to currency crises and identify factors that cause crises occurring at different times to evolve in different ways. With these goals in mind, we explore in this paper similarities and differences between the first and last of these episodes: the United Kingdom's 1931 and 1992 currency crises.