Monetary policy regimes and macroeconomic outcomes: Hong Kong and Singapore
This paper studies the relationship between macroeconomic behaviour and the monetary policy regime in Hong Kong and Singapore, using data for 1984-2004. We estimate an econometric model, comprising a Phillips curve, an IS curve and an equation for changes in the nominal effective exchange rate (NEER), which, in the case of Singapore, can be interpreted as a policy reaction function. The parameter estimates differ in two regards: the NEER responds to inflation in Singapore but not in Hong Kong, and the autoregressive parameter for the output gap in Singapore is smaller than in Hong Kong. Overall, the variability of inflation has been lower in Singapore, but the volatility of real economic activity has been similar in the two economies.
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- Eric Parrado, 2004. "Singapore's Unique Monetary Policy; How Does it Work?," IMF Working Papers 04/10, International Monetary Fund.
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- Michael B. Devereux, 2003. "A Tale of Two Currencies: the Asian Crisis and the Exchange Rate Regimes of Hong Kong and Singapore," Review of International Economics, Wiley Blackwell, vol. 11(1), pages 38-54, February.
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South East Asian Central Banks (SEACEN) Research and Training Centre, number occ33, May.
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- Taylor, John B., 1993. "Discretion versus policy rules in practice," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 39(1), pages 195-214, December.
- Gerlach, Stefan, 2005. "Monetary operations by Hong Kong's Currency Board," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1119-1135, January.
- M. S. Mohanty & Marc Klau, 2004. "Monetary policy rules in emerging market economies: issues and evidence," BIS Working Papers 149, Bank for International Settlements.
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"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.
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