Exchange Rate Volatility and Macroeconomic Performance in Hong Kong

18 Pages Posted: 2 Nov 2004

See all articles by Mark Crosby

Mark Crosby

University of Melbourne - Melbourne Business School

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Abstract

The paper presents evidence on whether Hong Kong's currency board arrangement, in place since 1983, has affected the volatility of real macroeconomic variables. Simple evidence on the relative volatilities of relevant macroeconomic variables before and after 1983 is presented, before a more formal econometric framework is utilized to examine the linkages between the exchange rate and the real economy. It is found that the currency board period has been one of relative stability in Hong Kong, though it has also been a period where external factors have been relatively benign. Even after controlling for the external environment, it is found that the currency board period is one of low macroeconomic volatility.

Suggested Citation

Crosby, Mark, Exchange Rate Volatility and Macroeconomic Performance in Hong Kong. Available at SSRN: https://ssrn.com/abstract=610470

Mark Crosby (Contact Author)

University of Melbourne - Melbourne Business School ( email )

200 Leicester Street
Carlton, Victoria 3053 3186
Australia

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