Hong Kong Output Dynamics: An Empirical Analysis
Pacific Economic Review, 7(3), 2002, pp. 465-487
Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper WP No. 11/2000
32 Pages Posted: 13 Jun 2022 Last revised: 15 Sep 2022
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Hong Kong Output Dynamics: An Empirical Analysis
Hong Kong Output Dynamics: An Empirical Analysis
Date Written: December 1, 2000
Abstract
This working paper was written by Yin-Wong Cheung (University of California, Santa Cruz and Hong Kong Institute for Monetary Research).
Advanced statistical techniques are used to analyze Hong Kong output dynamics. Hong Kong, Japan and the U.S. are found to share some common long-term and short-term cyclical variations. While the Hong Kong economy is susceptible to external shocks and is “Granger-caused” by the other two economies, local factors account for a large proportion of output growth variability and are mainly responsible for output uncertainty. On the transmission mechanism, the selected trade and financial variables have incremental explanatory power but do not lessen the ability of domestic and foreign output variables to explain Hong Kong growth dynamics. Interestingly, the U.S. does not appear to exert undue influence on Hong Kong.
Keywords: Common Trends/Cycles, Transmission Mechanism, Structural Determinants
JEL Classification: E32, F42, C22
Suggested Citation: Suggested Citation