Deflation in Hong Kong SAR
AbstractThis paper examines the causes of deflation in Hong Kong SAR, exploring whether it reflects a prolonged process of adjustment to cyclical shocks or whether it results from price equalization pressures arising from structural integration with mainland China. To gauge the relative importance of these factors, the paper provides both an econometric and a qualitative analysis of the price dynamics between Hong Kong SAR and Shenzhen, a neighboring city in mainland China. It finds that the role of price equalization as a source of deflation is minor. Deflation in Hong Kong SAR is best explained by successive cyclical shocks which have been amplified by balance-sheet and wealth effects.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 03/77.
Date of creation: 01 Apr 2003
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- Christoph Duenwald, 2000. "Property Prices and Speculative Bubbles - Evidence from Hong Kong SAR," IMF Working Papers 00/2, International Monetary Fund.
- Hans Genberg, 2005.
"External Shocks, Transmission Mechanisms and Deflation in Asia,"
062005, Hong Kong Institute for Monetary Research.
- Hans Genberg, 2005. "External shocks, transmission mechanisms and deflation in Asia," BIS Working Papers 187, Bank for International Settlements.
- Mehrotra, Aaron N., 2007.
"Exchange and interest rate channels during a deflationary era--Evidence from Japan, Hong Kong and China,"
Journal of Comparative Economics,
Elsevier, vol. 35(1), pages 188-210, March.
- Mehrotra, Aaron, 2005. "Exchange and interest rate channels during a deflationary era - Evidence from Japan, Hong Kong and China," BOFIT Discussion Papers 17/2005, Bank of Finland, Institute for Economies in Transition.
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