Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/97724
Authors: 
Ho, Chun-Yu
Ho, Wai-Yip Alex
Year of Publication: 
2009
Series/Report no.: 
IMFS Working Paper Series 20
Abstract: 
This paper examines the sustainability of the currency board arrangements in Argentina and Hong Kong. We employ a Markov switching model with two regimes to infer the exchange rate pressure due to economic fundamentals and market expectations. The empirical results suggest that economic fundamentals and expectations are key determinants of a currency board’s sustainability. We also show that the government’s credibility played a more important role in Argentina than in Hong Kong. The trade surplus, real exchange rate and inflation rate were more important drivers of the sustainability of the Hong Kong currency board.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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