Hong Kongâe(tm)s Growth Synchronization with China and the U. S. A Trend and Cycle Analysis |
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| Author:
| He, Dong
Liao, Wei
Wu, Tommy |
| Series title: | IMF Working Papers |
| ISBN: | 978-1-4843-6049-1 |
| Publication Date: | Jan 1900 |
| Publisher: | International Monetary Fund
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| Book Format: | Ebook |
| List Price: | USD $9.00 |
Book Description:
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This paper investigates the synchronization of Hong Kong SARâe(tm)s economic growth with mainland China and the United States. This paper identifies trends of economic growth based on the permanent income hypothesis. Specifically, the paper confirms whether realconsumption in Hong Kong SAR and mainland China satisfy the permanent incomehypothesis, at least in a weak form. It then identifies the permanent and transitory componentsof income of each economy using a simple state-space...
More DescriptionThis paper investigates the synchronization of Hong Kong SARâe(tm)s economic growth with mainland China and the United States. This paper identifies trends of economic growth based on the permanent income hypothesis. Specifically, the paper confirms whether realconsumption in Hong Kong SAR and mainland China satisfy the permanent incomehypothesis, at least in a weak form. It then identifies the permanent and transitory componentsof income of each economy using a simple state-space model. It uses structural vectorautoregression models to analyze how permanent and transitory shocks originating frommainland China and the United States affect the Hong Kong economy, and how suchinfluences evolve over time. The paperâe(tm)s main findings suggest that transitory shocks from theUnited States remain a major driving force behind Hong Kong SARâe(tm)s business cyclefluctuations. On the other hand, permanent shocks from mainland China have a larger impacton Hong Kong SARâe(tm)s trend growth.