The Real Effects of Low-for-long Interest Rates on Mainland Firms Listed in Hong Kong

This paper proposes a flexible-price theory of the role of money in an economy with incomplete idiosyncratic risk sharing. When the risk premium goes up, money provides a safe store of value that prevents interest rates from falling, reducing investment. Investment is too high during booms when risk is low, and too low during slumps when risk is high. Monetary policy cannot correct this: money is superneutral and Ricardian equivalence holds. The optimal allocation requires the Friedman rule and a tax/subsidy on capital. The real effects of money survive even in the cashless limit. (JEL E32, E41, E43, E44, E52)

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Time Series Properties of the Real Interest Rates of Hong Kong

The Journal of International Trade & Commerce ◽

10.16980/jitc.11.1.201502.365 ◽

2015 ◽

Vol 11 (1) ◽

pp. 365-375

Author(s):

위효민 ◽

배진호

Keyword(s):

Time Series ◽

Hong Kong ◽

Interest Rates ◽

Real Interest Rates ◽

The Real

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The Real Effects of Capital Inflows on Emerging Markets

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091501000413 ◽

2001 ◽

Vol 04 (02) ◽

pp. 165-202

Author(s):

Robert Dekle ◽

Cheng Hsiao ◽

Siyan Wang

Keyword(s):

Exchange Rates ◽

Interest Rates ◽

Latin American ◽

Real Exchange Rates ◽

East Asian ◽

Capital Inflows ◽

Real Output ◽

The Real ◽

Real Effects ◽

The Impact

We employ vector autoregression and cointegration estimation to examine the impact of net capital inflows on real exchange rates, output and real interest rates in several East Asian and Latin American economies during the 1990s. We find that increases in net capital inflows leads to appreciations of the real exchange rates in all the countries but have no impact on real output except for Thailand.

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