Abstract
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 language | English |
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| Title of host publication | China, Hong Kong and the world economy : Studies on globalization |
| Editors | Lok Sang HO, Robert ASH |
| Place of Publication | New York |
| Publisher | Palgrave Macmillan |
| Chapter | 11 |
| Pages | 200-218 |
| Number of pages | 19 |
| ISBN (Print) | 9781403987426 |
| Publication status | Published - 2006 |