This paper reviews the literature on alternative exchange-rate arrangements for a small economy. It discusses exchage-rate management for short-run stabilization purposes and the choice of exchange-rate regimes to foster policy discipline. Recent research has emphasized that the appropriate...

This paper uses a semi-structural vector autoregression approach to estimate the relative importance of domestic and foreign shocks as sources of macroeconomic fluctuations in Hong Kong since the adoption of the currency board. We find that external factors are clearly dominant in the medium- to...

This paper extends the new hybrid Keynesian Phillips curve (NKPC) to the open economy context. We hypothesise that pricing decisions depend on both labour costs and intermediate imported input prices. The results for Hong Kong are consistent with the theory if import prices are given substantial...

This paper provides empirical evidence on the dynamics of prices and wages in Hong Kong. The results imply that the deflation in Hong Kong since 1997 can be understood using a conventional macroeconomic framework wherein foreign influences constitute the basic underlying shocks, and adjustment...

While the relationship between volatility and risk is central to much of the financial literature it has not been incorporated systematically into assessment of sovereign debt sustainability. This paper attempts to fill this gap by studying how the probability distribution of sovereign debt to...