This paper analyzes trend and cycle movements of Hong Kong inflation. The empirical model is an unobserved components model that is consistent with the New Keynesian Phillips curve and is estimated using Hong Kong, U.S., and China inflation and output data. The model decomposes Hong Kong...

In this paper, we investigate the nature of structural breaks in inflation by estimating a version of the New Keynesian Phillips curve (NKPC) in the presence of a unit root in inflation. We show that, with a unit root in inflation, the NKPC implies an unobserved components model that consists of...

In this paper, we investigate the nature of structural breaks in inflation by estimating a version of the New Keynesian Phillips curve (NKPC) in the presence of a unit root in inflation. We show that, with a unit root in inflation, the NKPC implies an unobserved components model that consists of...