Determinants of Deflation In Hong Kong SAR

Author/Editor: N'Diaye, Papa M'B. P.
Publication Date: December 01, 2003
Summary: This paper presents a comprehensive econometric analysis of the determinants of deflation in Hong Kong SAR. The analysis helps to determine the relative contributions of factors such as increased productivity, scarce money supply, and excess capacity in determining deflation. The main conclusion is that the effects of permanent shocks, such as productivity shocks and shocks related to changes in the money supply and price convergence with trading partners, have become more important in explaining deflation. In addition, the effects of temporary shifts in aggregate demand have been perpetuated by negative wealth and balance-sheet effects in the corporate and household sectors arising from asset-price declines over the past five years.
Subject(s): Deflation | Hong Kong SAR | Hong Kong Special Administrative Region of China

Author's Keyword(s): Deflation | Structural VAR
Publication Date: December 01, 2003
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2502003 Pages: 27
US$15.00 (Academic Rate:
US$15.00 )
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