Hong Kongs Exchange Rate Regimes In The Twentieth Century
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| Author | : Tony Latter |
| Publisher | : |
| Total Pages | : 44 |
| Release | : 2007 |
| Genre | : |
| ISBN | : |
The three key changes to Hong Kong's monetary framework in the twentieth century are examined. In the first half of the 1930s, the rising price of silver caused mounting difficulties for China and Hong Kong, both then operating a silver standard. Consideration of a possible regime change in Hong Kong spread over a number of years, but it was always decided not to move before China. Eventually, when China left silver in 1935, Hong Kong left too and adopted what was effectively a sterling-based currency board. This is judged to have been the correct decision, although a case may be argued that the change should have taken place a couple of years earlier. In 1972, prompted by disenchantment with the weakness of sterling and the UK government's decision to let it float, the Hong Kong government abandoned both the sterling link and, in apparent ignorance of its fundamental monetary importance, the currency board principle. This propelled Hong Kong, which had no central bank at the time, into an era of monetary indeterminacy, where stability was dependent essentially on consensus and mutuality of interests between government and the principal banks. The system was destined to crack if ever market pressures exerted too great a strain, which they finally did in 1983. The currency board was then re-instituted, on this occasion based on the US dollar, and has succeeded in maintaining a stable exchange rate ever since. Various refinements in the years since 1983, including the establishment of the Monetary Authority in the role of a central bank, have made the system more robust. With a central bank, Hong Kong now has the capacity to operate an alternative monetary policy framework, should it so wish. For each of the three regime changes, this paper explores the background, both political and economic, the options which were considered and the reasons for the eventual decisions.
| Author | : Lok Sang Ho |
| Publisher | : Springer Science & Business Media |
| Total Pages | : 258 |
| Release | : 2011-06-28 |
| Genre | : Business & Economics |
| ISBN | : 1461510414 |
The Asian crisis of 1997-1998 was a major influence on macroeconomic thinking concerning exchange rate regimes, the functioning of international institutions, such as the IMF and the World Bank, and international contagion of macroeconomic instability from one country to another. Exchange Rate Regimes and Macroeconomic Stability offers perspectives on these issues from the viewpoints of two Nobel Laureates, an IMF economist, and Asian economists. This book contributes new ideas to the ongoing debate on the role of domestic monetary authorities and international institutions in reducing the likelihood of international financial crises, as well as the problems associated with various exchange rate regimes from the standpoint of macroeconomic stability. Overall, the chapters contained in this volume offer interesting perspectives, which have been stimulated by the recent events in the foreign exchange market. They provide a useful reference for anyone interested in the development of exchange rate regimes, and represent considerable reflection by economists half a century after Bretton Woods.
| Author | : Tony Latter |
| Publisher | : Hong Kong University Press |
| Total Pages | : 164 |
| Release | : 2007-08-01 |
| Genre | : Business & Economics |
| ISBN | : 9622098762 |
Since 1983 Hong Kong has pegged its currency to the US dollar through a currency board system that is unique among the world's advanced economies. In this first comprehensive book about Hong Kong's monetary system, Tony Latter draws on his considerable experience in central banking generally, and with the Hong Kong Monetary Authority in particular, to give a detailed account of how the system operates; why it was introduced; what are the important differences from other monetary regimes; and how it has performed. After a brief overview of Hong Kong's currency board system, two chapters explain the key features of mainstream monetary policy as practised in most economies and how the currency board differs. Then three chapters deal with the history of money in Hong Kong from the mid-1930s, describing the salient events and changes of the period up to the 1983 crisis and the consequent re-adoption of the currency board. Descriptions of the functioning of the system after 1983 and its evolution to the present day then follow. The book concludes with assessments of the performance of the currency board since 1983 and of the Hong Kong economy more widely. This book is designed both to inform lay readers and to provide substance for monetary economists. Given the key role of monetary policy in providing a stable foundation for a strong economy, the book is of importance for all business people in Hong Kong, while the more analytical sections provide essential reading for all students of economics.
| Author | : Sau San Chan |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Hong Kong is a unique case in the world history of exchange systems. As a territory under British administration for more than 150 years, it has maintained a floating exchange rate relationship with its sovereignty power in a separate currency area for more than a century. This exchange arrangement once existed with a peculiar institutional setting that the government had no control over the monetary base. In the post-1997 era, the survival of this "one country, two currencies" model depends on whether the authorities will continue to allow the HK dollar to float against the Renminbi. Based on the theory of optimum currency areas, this paper, with the ultimate objective to identify the optimal choice of exchange rate regime for HK, explores the economic rationale behind these interesting phenomena. The two inter-related issues--the choice of fixed versus floating exchange rate regimes and the optimal target of link currency--are addressed. It is argued that the structural characteristics and the development of monetary institutions have been the crucial determinants of the optimal exchange system for the sub-national economy. Our findings provide new interpretations regarding the monetary crisis in October 1983 and the monetary reforms since July 1988 and delineate policy implications for the exchange arrangements before and after 30 June 1997. It is suggested that HK should stay in the U.S. currency area, which has a floating exchange rate relationship with the currency area of the Territory's sovereignty power. The "one country, two currencies" model should be intact as long as the structural characteristics of HK remain unchanged. This paper also adds value to the empirical studies of optimum currency areas, which have been dominated traditionally by the verification of the diversified choices between fixed and floating exchange rate regimes and contemporarily by the justification for the EMU. It represents the first effort to deal with a model of many currencies for one country since R. Mundell introduced the idea that the domain of optimum currency areas should be defined by structural characteristics rather than national boundary in 1961.
| Author | : Yum K. Kwan |
| Publisher | : |
| Total Pages | : 46 |
| Release | : 1996 |
| Genre | : Currency boards |
| ISBN | : |
The paper discusses the historical background and institutional details of Hong Kong's currency board. We argue that its experience provides a good opportunity to test the macroeconomic implications of the currency board regime. Using the method of Blanchard and Quah (1989), we show that the parameters of the structural equations and the characteristics of supply and demand shocks have significantly changed since adopting the regime. Variance decomposition and impulse response analyses indicate Hong Kong's currency board is less susceptible to supply shocks, but demand shocks can cause greater short-term volatility under the system. The decent performance of Hong Kong's currency board is due mainly to the stable fiscal policy of its government. Counter-factual exercises also show that three-fourths of the reduction in observed output volatility and two-thirds of that in observed inflation volatility are explained by the adoption of the currency board, while the remainder is explained by changes in the external environment. The improvement in stability does not rule out the possibility of monetary collapse, however.
| Author | : Sau-San Chan |
| Publisher | : |
| Total Pages | : |
| Release | : 2017-01-27 |
| Genre | : |
| ISBN | : 9781374772014 |
This dissertation, "Choosing an Exchange Rate Regime for a Sub-national Economy From an Optimum Currency Area Perspective: the Caseof Hong Kong" by Sau-san, Chan, 陳守信, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. DOI: 10.5353/th_b3123558 Subjects: Currency question - China - Hong Kong Foreign exchange rates - China - Hong Kong
| Author | : C. Schenk |
| Publisher | : Palgrave Macmillan |
| Total Pages | : 201 |
| Release | : 2009-01-01 |
| Genre | : Business & Economics |
| ISBN | : 9781349302703 |
Hong Kong SAR is now highly unusual as a large economy running a currency board system that pegs the Hong Kong Dollar to the US Dollar. This volume explores the origins and persistence of this system, presenting the viewpoint of several of the main protagonists in the operation of the currency board since 1983 as well as new research by academics.
| Author | : C. Schenk |
| Publisher | : Springer |
| Total Pages | : 211 |
| Release | : 2008-11-28 |
| Genre | : Business & Economics |
| ISBN | : 0230594743 |
Hong Kong SAR is now highly unusual as a large economy running a currency board system that pegs the Hong Kong Dollar to the US Dollar. This volume explores the origins and persistence of this system, presenting the viewpoint of several of the main protagonists in the operation of the currency board since 1983 as well as new research by academics.
| Author | : 林向愷 |
| Publisher | : |
| Total Pages | : |
| Release | : |
| Genre | : |
| ISBN | : |
| Author | : David F. DeRosa |
| Publisher | : John Wiley & Sons |
| Total Pages | : 256 |
| Release | : 2000-01-18 |
| Genre | : Business & Economics |
| ISBN | : 9780471316411 |
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