This working paper was written by Kang Shi (The Chinese University of Hong Kong) and Juanyi Xu (Hong Kong University of Science and Technology, and Simon Fraser University).This paper develops a small open economy model with sticky prices to show why a flexible exchange rate policy is not...

This working paper was written by Cho-Hoi Hui (Hong Kong Monetary Authority) and Tsz-Kin Chung (Hong Kong Monetary Authority).The economic-political instability of a country, which is tied to its credit risk, often leads to sharp depreciation and heightened volatility in its currency. This paper...

This working paper was written by Ana Fernandes (University of Sussex) and Heiwai Tang (Tufts University and Centro Studi Luca d'Agliano).This paper uses detailed product-level export data for China and proposes an extension of the Antràs and Helpman (2004) framework that includes investments...

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 Reuven Glick (Federal Reserve Bank of San Francisco) and Michael Hutchison (University of California, Santa Cruz).In recent years China has faced an increasing trilemma—how to pursue an independent domestic monetary policy and limit exchange rate flexibility,...

This working paper was written by Ronald McKinnon (Stanford University) and Gunther Schnabl (Tübingen University).Rapidly growing Chinese exports are middle-tech––and increasingly high-tech––manufactured goods. China runs a huge and growing bilateral trade surplus with the United...

This working paper was written by Yin-wong Cheung (University of California, Santa Cruz), Kon S. Lai (California State University, Los Angeles) and Michael Bergman (Lund University).The conventional view, as expounded by sticky-price models, is that price adjustment determines the PPP reversion...

This working paper was written by Yin-wong Cheung (University of California).The article examines the Hong Kong export performance. A standard export demand formulation is used as the benchmark. Then, we investigate the effects of real exchange rate volatility, “third” country competition,...

This occasional paper was written by Juan Carlos Martinez Oliva (Bank of Italy).This paper analyses the sectoral shifts that occurred in the Chinese economy in the period 1980-2015. This is done by highlighting the main patterns of growth and productivity using Chinese official statistics. The...

This occasional paper was written by Hyun Song Shin (Princeton University).Over the last decade, the internal and external macroeconomic imbalances in China have risen to unprecedented levels. In 2008, China’s national savings rate soared to over 53 percent of GDP, whereas the current account...