Determinants of Deflation In Hong Kong SAR

 
Author/Editor: N'Diaye, Papa M'B. P.
 
Publication Date: December 01, 2003
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
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.
 
Series: Working Paper No. 03/250
Subject(s): Deflation | Hong Kong SAR | Hong Kong Special Administrative Region of China

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