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This chapter considers the law of reflux and its alternative interpretations: (1) as a monetary policy rule for stabilizing the price level and (2) as rule for individual banks to follow to remain liquid. The chapter argues that Adam Smith endorsed only the second interpretation, and that the...
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The features under the two-sided Convertibility Zone of the Hong Kong dollar resemble in many ways the target zone … rates, to assess the credibility of the Convertibility Zone since it was introduced in May 2005. The empirical evidence … Convertibility Zone …
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vanishes at the Convertibility Undertakings making it inaccessible to the limits. The Hong Kong dollar does not show any strong … tendency to revert towards the centre of the Convertibility Zone. This is perhaps not surprising as there have been no …
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