Monetary policy regimes and macroeconomic outcomes: Hong Kong and Singapore

Petra Gerlach-Kristen and Stefan Gerlach (hms.gerlach@gmail.com)

No 204, BIS Working Papers from Bank for International Settlements

Abstract: This paper studies the relationship between macroeconomic behaviour and the monetary policy regime in Hong Kong and Singapore, using data for 1984-2004. We estimate an econometric model, comprising a Phillips curve, an IS curve and an equation for changes in the nominal effective exchange rate (NEER), which, in the case of Singapore, can be interpreted as a policy reaction function. The parameter estimates differ in two regards: the NEER responds to inflation in Singapore but not in Hong Kong, and the autoregressive parameter for the output gap in Singapore is smaller than in Hong Kong. Overall, the variability of inflation has been lower in Singapore, but the volatility of real economic activity has been similar in the two economies.

Keywords: Hong Kong; inflation; monetary policy; Singapore (search for similar items in EconPapers)
JEL-codes: E31 E32 E58 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Chapter: Monetary policy regimes and macroeconomic outcomes: Hong Kong and Singapore (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:204

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