Prior to the late 1990s, low unemployment was a standard feature of macroeconomic life in Hong Kong. Between 1985 and 1997, the unemployment rate averaged 2.5 percent. But the picture changed dramatically thereafter with the unemployment rate rising to 6.2 percent by 1999 and remaining above 5...

This working paper was written by Dudley Cooke (Trinity College Dublin).I develop a two country general equilibrium model with heterogeneous price-setting firms to understand how shocks to monetary policy and aggregate labor productivity impact trade integration, which I capture through the...

This working paper was written by Chao Gu (University of Missouri), Guido Menzio (New York University and NBER), Randall Wright (Zhejiang University, University of Wisconsin - Madison and NBER) and Yu Zhu (Bank of Canada).During the financial crisis, relatively centralized markets functioned...

This working paper was written by Cho-Hoi Hui (Hong Kong Monetary Authority), Chi-Fai Lo (The Chinese University of Hong Kong) and Ho-Yan Ip (The Chinese University of Hong Kong).Asymmetric behaviour has been documented in unemployment rates which increase quickly in recessions but decline...

This working paper was written by Juan Carlos Martinez Oliva (Bank of Italy).In view of the debate on exchange rate stabilization in Asia, this paper introduces a new and original approach to the determination of equilibrium real exchange rates (ERER) across ASEAN+3. Existing literature usually...

This working paper was written by Dudley Cooke (Trinity College Dublin and Hong Kong Institute for Monetary Research).I develop a two country general equilibrium model with heterogeneous price-setting firms to understand how shocks to monetary policy and aggregate labor productivity impact trade...

This working paper was written by Michael B. Devereux (Centre for Economic Policy Research, University of British Columbia and Hong Kong Institute for Monetary Research) and Alan Sutherland (Centre for Economic Policy Research and University of St Andrews).Open economy macroeconomics typically...

This working paper was written by Cho-Hoi Hui (Hong Kong Monetary Authority), Andrew Wong(Hong Kong Monetary Authority) and Chi-Fai Lo (The Chinese University of Hong Kong).This note uses a target-zone model to study the bond yield movements under yield curve control. The bond yield is assumed...

This working paper was written by Max Bruche (Humboldt University of Berlin) and John C.F. Kuong (INSEAD).We consider a model in which dealers intermediate trades between clients and provide immediacy, or, market liquidity. Dealers can exert unobservable effort to improve the chance of...