In this paper, an incomplete financial market model was built to illustrate the impacts of the market incompleteness on the benefits of trade liberalization. Particularly, it will focus on the investigation of the impacts of different sequences of opening up the goods market. That is, should the...

The need for a deeper understanding of the operation of Hong Kong's currency board arrangements was highlighted during the Asian financial crisis in 1998. A model-based approach built on hypothetical stochastic simulations would be useful for this purpose. This paper develops a new procedure of...

Based on a simple theoretical exchange rate model, this paper shows how persistent balance of payments surpluses build up appreciation pressure on a fixed exchange regime in a partially-open economy such as China. A deregulated market interest rate may work as an automatic stabilizer to release...

The paper examines the relationship between some key measures of macroeconomic performance and fiscal decentralization in OECD countries, and the impact on this relationship of increased policy co-ordination among countries since 1985. It is shown that prior to 1985 there was a significant...

This paper investigates the effectiveness monetary policy by Granger causality tests in the two regimes of inflation and deflation, respectively. The surplus lag rolling estimation is applied to deal with the problem of the frequent structural changes in the Chinese monetary system. We found...

The purpose of this paper is to investigate the impacts of rationing on firm behavior. A virtual price approach is adopted to derive the rationed elasticities of variable input demands and output supply under a translog profit function. To illustrate the difference between the rationed and...