Download or read book Hong Kong s Currency Board and Changing Monetary Regimes written by Yum K. Kwan and published by . This book was released on 1996 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper discusses the historical background and institutional details of Hong Kong's currency board. We argue that its experience provides a good opportunity to test the macroeconomic implications of the currency board regime. Using the method of Blanchard and Quah (1989), we show that the parameters of the structural equations and the characteristics of supply and demand shocks have significantly changed since adopting the regime. Variance decomposition and impulse response analyses indicate Hong Kong's currency board is less susceptible to supply shocks, but demand shocks can cause greater short-term volatility under the system. The decent performance of Hong Kong's currency board is due mainly to the stable fiscal policy of its government. Counter-factual exercises also show that three-fourths of the reduction in observed output volatility and two-thirds of that in observed inflation volatility are explained by the adoption of the currency board, while the remainder is explained by changes in the external environment. The improvement in stability does not rule out the possibility of monetary collapse, however.

Download or read book Hong Kong s Money written by Tony Latter and published by Hong Kong University Press. This book was released on 2007-08-01 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since 1983 Hong Kong has pegged its currency to the US dollar through a currency board system that is unique among the world's advanced economies. In this first comprehensive book about Hong Kong's monetary system, Tony Latter draws on his considerable experience in central banking generally, and with the Hong Kong Monetary Authority in particular, to give a detailed account of how the system operates; why it was introduced; what are the important differences from other monetary regimes; and how it has performed. After a brief overview of Hong Kong's currency board system, two chapters explain the key features of mainstream monetary policy as practised in most economies and how the currency board differs. Then three chapters deal with the history of money in Hong Kong from the mid-1930s, describing the salient events and changes of the period up to the 1983 crisis and the consequent re-adoption of the currency board. Descriptions of the functioning of the system after 1983 and its evolution to the present day then follow. The book concludes with assessments of the performance of the currency board since 1983 and of the Hong Kong economy more widely. This book is designed both to inform lay readers and to provide substance for monetary economists. Given the key role of monetary policy in providing a stable foundation for a strong economy, the book is of importance for all business people in Hong Kong, while the more analytical sections provide essential reading for all students of economics.

Download or read book Hong Kong s Exchange Rate Regimes in the Twentieth Century written by Tony Latter and published by . This book was released on 2007 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: The three key changes to Hong Kong's monetary framework in the twentieth century are examined. In the first half of the 1930s, the rising price of silver caused mounting difficulties for China and Hong Kong, both then operating a silver standard. Consideration of a possible regime change in Hong Kong spread over a number of years, but it was always decided not to move before China. Eventually, when China left silver in 1935, Hong Kong left too and adopted what was effectively a sterling-based currency board. This is judged to have been the correct decision, although a case may be argued that the change should have taken place a couple of years earlier. In 1972, prompted by disenchantment with the weakness of sterling and the UK government's decision to let it float, the Hong Kong government abandoned both the sterling link and, in apparent ignorance of its fundamental monetary importance, the currency board principle. This propelled Hong Kong, which had no central bank at the time, into an era of monetary indeterminacy, where stability was dependent essentially on consensus and mutuality of interests between government and the principal banks. The system was destined to crack if ever market pressures exerted too great a strain, which they finally did in 1983. The currency board was then re-instituted, on this occasion based on the US dollar, and has succeeded in maintaining a stable exchange rate ever since. Various refinements in the years since 1983, including the establishment of the Monetary Authority in the role of a central bank, have made the system more robust. With a central bank, Hong Kong now has the capacity to operate an alternative monetary policy framework, should it so wish. For each of the three regime changes, this paper explores the background, both political and economic, the options which were considered and the reasons for the eventual decisions.

Download or read book Money and Finance in Hong Kong written by Y. C. Jao and published by World Scientific. This book was released on 1998 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prepared by the East Asian Institute, NUS, which promotes research on East Asian developments particularly the political, economic and social development of contemporary China (including Hong Kong and Taiwan), this series of research reports is intended for policy makers and readers who want to keep abreast of the latest developments in China.

Download or read book Hong Kong SAR Monetary and Exchange Rate Challenges written by C. Schenk and published by Springer. This book was released on 2008-11-28 with total page 211 pages. Available in PDF, EPUB and Kindle. Book excerpt: Hong Kong SAR is now highly unusual as a large economy running a currency board system that pegs the Hong Kong Dollar to the US Dollar. This volume explores the origins and persistence of this system, presenting the viewpoint of several of the main protagonists in the operation of the currency board since 1983 as well as new research by academics.

Download or read book Comparative Studies on the Currency Board Regime and Its Impact on Hong Kong s Economy written by Kwo Ping Tam and published by . This book was released on 2010 with total page 320 pages. Available in PDF, EPUB and Kindle. Book excerpt: My thesis attempts to search evidence on the performance of the currency board regime and its impact on Hong Kong's economy. Three sets of related questions have been set up and carefully investigated in my empirical models. Chapter 2 investigates output growth and inflation rate in order to compare the historical performance of free-floating and currency board regimes for Hong Kong. I apply some advanced econometrics tools to identify my structural VAR models and offer appropriate analysis. My first empirical model suggests that output returns to a steady state much faster in a flexible exchange rate regime than in a fixed exchange rate regime after an aggregate demand shock. My evidence offers an essential answer to the question on why the recovering process of Hong Kong from the Asian financial crisis lasted longer compared with the other Asian countries with a flexible exchange rate regime. Furthermore, my counter-factual analysis suggests that a free-floating regime may generate much smaller output variance in Hong Kong and deliver higher output and price levels to Hong Kong. Chapter 3 investigates the currency board regime from 1984 to 2007, by considering some important variables which have significant impacts on Hong Kong's economy. For instance my empirical models attempt to examine the economic relationships with the US economy under the currency board regime and the close economic relationships with China under a Closer Economic Partnership Agreement with Mainland China. My models emphasises the importance of entrepot trade for Hong Kong's economy. Evidence shows that those exogenous variables have significant impacts on Hong Kong's economy, and they are one of the important factors when considering the choice of exchange rate regimes. My empirical evidence indicates some new findings which contradict existing studies which conclude that the Chinese economy is much less significant than the US economy in explaining Hong Kong's output variance. Chapter 4 examines the real effective exchange rate misalignment of the two economies, Hong Kong and Singapore, and offers new policy implications on the choice of exchange rate regimes. Entrepot trades are essential to both economies. While the literature has paid little attention to such an important character and shown evidence of larger scale REER misalignment in Hong Kong compared with Singapore, my model reveals that including such an important variable has remarkably improved the model and offered strikingly different conclusions. I have applied Vector Error Correction Modelling and the Johansson Method in identifying the empirical models. Evidence suggests that Hong Kong performs well in terms of small real exchange rate misalignment even under its currency broad regime. My thesis indicates that although there are limitations in the currency broad regime in terms of relatively slow recovery from external demand shocks and relatively larger output variance, the regime is still a preferable choice for Hong Kong, especially when we consider the close economic link with Mainland China and the United States. Moreover, there is no evidence in my models to suggest that the real exchange rate misalignment was significantly larger in the case of Hong Kong's currency board regime.

Download or read book Hong Kong s Link to the US Dollar written by John Greenwood and published by . This book was released on 2007 with total page 328 pages. Available in PDF, EPUB and Kindle. Book excerpt: A great book describing how Hong Kong surmounted the great currency crisis of 1982-83, and then rationalizes why and how the Hong Kong Monetary Authority subsequently evolved from a pure currency board to a near central bank. The definitive historical record by the most consummately influential outsider. - - Ronald I. McKinnon, William D. Eberle Professor of International Economics, Stanford University. John Greenwood OBE is Chief Economist of INVESCO plc and a member of the Shadow Monetary Policy Committee in England.

Download or read book Credibility of Hong Kong s Currency Board written by Yum-Keung Kwan and published by . This book was released on 1999 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Exchange Rate Systems in Hong Kong and Singapore written by Paul Sau-Leung Yip and published by . This book was released on 2005 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Evolution of the Hong Kong Currency Board During Global Exchange Rate Instability written by Catherine Ruth Schenk and published by . This book was released on 2009 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Changes in Exchange Rates in Rapidly Developing Countries written by Takatoshi Ito and published by University of Chicago Press. This book was released on 2007-12-01 with total page 466 pages. Available in PDF, EPUB and Kindle. Book excerpt: The exchange rate is a crucial variable linking a nation's domestic economy to the international market. Thus choice of an exchange rate regime is a central component in the economic policy of developing countries and a key factor affecting economic growth. Historically, most developing nations have employed strict exchange rate controls and heavy protection of domestic industry-policies now thought to be at odds with sustainable and desirable rates of economic growth. By contrast, many East Asian nations maintained exchange rate regimes designed to achieve an attractive climate for exports and an "outer-oriented" development strategy. The result has been rapid and consistent economic growth over the past few decades. Changes in Exchange Rates in Rapidly Developing Countries explores the impact of such diverse exchange control regimes in both historical and regional contexts, focusing particular attention on East Asia. This comprehensive, carefully researched volume will surely become a standard reference for scholars and policymakers.

Download or read book Hong Kong s Currency Board System an Analysis written by Goeksen Iyikoey and published by . This book was released on 2007 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2005 in the subject Economics - Case Scenarios, grade: 2,3, University of Hamburg (Arbeitsbereich Makrookonomie und Quantitative Wirtschaftspolitik), course: Seminar "Economic Growth and Development in China," 24 entries in the bibliography, language: English, abstract: Currency Boards are extensions of Fixed Exchange Rate Regimes in which the domestic currency is pegged to a foreign currency. After Currency Boards have been largely replaced by central banks in the middle of last century, the system regained popularity in the 1980s and especially 1990s again. In this book, pros and cons of adopting a Currency Board System and the macroeconomic effects of the system on inflation, growth and unemployment are presented and discussed. Furthermore, the Hong Kong Currency Board (HKCB) is being analyzed as a main case including the following issues: description of tasks of the HKCB, difficulties in operating the system, predictability of US-Dollar purchases by the board and an analysis of the HKCB performance in the past.

Download or read book The Hong Kong Linked Rate Mechanism written by Christopher L. Culp and published by . This book was released on 2013 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: A currency board is a monetary institution that issues notes and coins which are fully convertible into a reserve currency at a fixed rate on demand. Reserves are equal to 100 per cent, or slightly more, of a board's notes and coins. There have been over seventy currency boards and all have maintained convertibility, even during civil wars. Although successful, currency boards fell victim to changing economic fashions, and most were replaced by central banks after World War II. Hong Kong has one of the few remaining currency board systems, although that system remains largely unknown, even to monetary specialists. An analysis of the evolution and working of Hong Kong's system is presented in this text. Strengths and weaknesses of the current system are discussed, and measures to correct weaknesses are suggested. The desirability of the currency board system for developing countries, particularly those making the transformation from socialism to capitalism, is also examined.

Download or read book Monetary Operations Under the Currency Board System written by Hong Kong Monetary Authority and published by . This book was released on 2014 with total page 10 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper documents the major policy reforms to Hong Kong's Linked Exchange Rate System (LERS) that have enabled it to evolve into the highly credible, efficient, and transparent system it is today. It discusses the operating mechanism of the system in adjusting capital flows, and the role the Hong Kong Monetary Authority plays in maintaining the smooth functioning of the LERS. It shows that the LERS has stood the test of two major financial crises, large cross-border capital flows, and occasional scepticism over its sustainability and suitability for the Hong Kong economy over the past three decades.Full publication: "http://ssrn.com/abstract=2420030" Market Volatility and Foreign Exchange Intervention in EMEs: What Has Changed?

Download or read book Exchange Rate Regimes and Macroeconomic Stability written by Lok Sang Ho and published by Springer Science & Business Media. This book was released on 2011-06-28 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Asian crisis of 1997-1998 was a major influence on macroeconomic thinking concerning exchange rate regimes, the functioning of international institutions, such as the IMF and the World Bank, and international contagion of macroeconomic instability from one country to another. Exchange Rate Regimes and Macroeconomic Stability offers perspectives on these issues from the viewpoints of two Nobel Laureates, an IMF economist, and Asian economists. This book contributes new ideas to the ongoing debate on the role of domestic monetary authorities and international institutions in reducing the likelihood of international financial crises, as well as the problems associated with various exchange rate regimes from the standpoint of macroeconomic stability. Overall, the chapters contained in this volume offer interesting perspectives, which have been stimulated by the recent events in the foreign exchange market. They provide a useful reference for anyone interested in the development of exchange rate regimes, and represent considerable reflection by economists half a century after Bretton Woods.

Download or read book Liquidity Management under Fixed Exchange Rate with Open Capital Account written by Mariam El Hamiani Khatat and published by International Monetary Fund. This book was released on 2019-03-18 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper introduces a theoretical framework for liquidity management under fixed exchange rate arrangement, derived from the price-specie flow mechanism of David Hume. The framework highlights that the risk of short-term money market rates un-anchoring from the uncovered interest rate parity due to money and foreign exchange market frictions could jeopardize financial stability and market development. The paper then discusses operational solutions that stabilize money market rates close to the level implied by the Uncovered Interest Rate Parity (UIP). Liquidity management under fixed exchange rate with an open capital account presents specific challenges due to: (1) the larger liquidity shocks induced by foreign reserve swings that challenge the development of money markets; and (2) more complicated liquidity forecasts. The theoretical framework is empirically tested based on the estimate of “offset” coefficients for Denmark and Hong Kong SAR.

Download or read book What Role for Currency Boards written by John Williamson and published by Peterson Institute for International Economics. This book was released on 1995 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Explains what a currency board is and how it differs from a central bank. Examines the advantages and disadvantages of each type of arrangement.