Polls and pounds: public opinion and exchange rate behavior in Britain. Quarterly Journal of Political Science | January 1, 2006| | COPYRIGHT 2006 Now Publishers, 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

ABSTRACT

This article examines the relationship between government popularity and exchange rate movements in Britain since 1987. It argues that: (1) unexpected drops in the government's public support lead to currency depreciations and increased exchange rate volatility, and (2) unanticipated depreciations hurt the government's public support. It estimates separate models of the exchange rate and government voting intention iteratively and recursively. At each iteration, measures of exchange rate and public opinion shocks are generated. These generated variables are ...

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