Transmitted unemployment under the linked exchange rate system: Evidence from Hong Kong

Transmitted unemployment under the linked exchange rate system: Evidence from Hong Kong

This paper explores a link between exchange rate and unemployment at the aggregate level. We find that 1% increase in the US unemployment rate transmits, on average, 0.53% increase in Hong Kong unemployment under the linked exchange rate system. ► Interactions between two Phillips Curves of two coun...

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Veröffentlicht in:Economics letters 2012-10, Vol.117 (1), p.131-133
Hauptverfasser: Ran, Jimmy, Zhou, Youqing
Format: Artikel
Sprache:eng
Schlagworte:
Correlation analysis
Economic models
Evidence
Exchange market
Exchange rate
Exchange rates
Foreign exchange rates
Hong Kong
Studies
Transmission effect
U.S.A
Unemployment
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Zusammenfassung:This paper explores a link between exchange rate and unemployment at the aggregate level. We find that 1% increase in the US unemployment rate transmits, on average, 0.53% increase in Hong Kong unemployment under the linked exchange rate system. ► Interactions between two Phillips Curves of two countries. ► Linked exchange rate system. ► Cointegration of unemployment and inflation rate differential. ► Unemployment transmission from the US to Hong Kong.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2012.04.096