Macroeconomic instability in Hong Kong : internal and external factors

Yue MA, Raymond C.W. NG

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This chapter examines the extent to which the dollar peg may have helped to exacerbate macroeconomic volatilities in Hong Kong, by estimating an IS-LM open economy model for Hong Kong via a structural vector auto-regressive (VAR) process (Gali, 1992; Rogers, 1999). The econometric techniques of impulse response and variance decomposition analysis are applied to the VAR model to separate the major causes of inflation and instability.
Original languageEnglish
Title of host publicationChina, Hong Kong and the world economy : Studies on globalization
EditorsLok Sang HO, Robert ASH
Place of PublicationNew York
PublisherPalgrave Macmillan
Number of pages19
ISBN (Print)9781403987426
Publication statusPublished - 2006

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