Hong Kong’s New Keynesian Phillips Curve : Sticky Information or Sticky Price?
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 42-55 |
| Journal / Publication | Pacific Economic Review |
| Volume | 27 |
| Issue number | 1 |
| Online published | 24 Jan 2021 |
| Publication status | Published - Feb 2022 |
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Abstract
This paper studies the validity of Hong Kongʼs New Keynesian Phillips Curve, focusing on the sticky price and the sticky information model. Drawing on Hong Kongʼs quarterly data 1982Q1–2017Q2, we find that (a) both models can account for the cyclical movements of the observed inflation dynamics, but the sticky information model appears to be better in predictive performance; (b) the Hong Kong economy is characterized by substantial price rigidity but very low information rigidity; and (c) the sticky‐information model highlights the importance of past expectations in explaining the inflation dynamics in Hong Kong.
Citation Format(s)
Hong Kong’s New Keynesian Phillips Curve: Sticky Information or Sticky Price? / Hung, Tsz H.; Kwan, Yum K.
In: Pacific Economic Review, Vol. 27, No. 1, 02.2022, p. 42-55.
In: Pacific Economic Review, Vol. 27, No. 1, 02.2022, p. 42-55.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
