51. Effects of capital flow on the equity and housing markets in Hong Kong
- Author
-
Kenneth K. Chow, Yin-Wong Cheung, and Matthew S. Yiu
- Subjects
Economics and Econometrics ,050208 finance ,05 social sciences ,Equity (finance) ,Monetary economics ,Differential effects ,Capital (economics) ,0502 economics and business ,Capital management ,Financial crisis ,Economics ,Open economy ,050207 economics ,Capital flows ,Emerging markets - Abstract
The revival of strong capital flows to emerging economies following the global financial crisis in 2008–2009 has rekindled the debate on effects of excessive capital inflows. We study the effects of official and illicit capital flows on Hong Kong, which is a small and open economy with minimal restrictions on cross-border fund movements. It is found that the official and illicit capital flow measures display a low level of comovement and exhibit differential effects on Hong Kong's equity and residential housing markets. The results highlight the complexity of managing capital flows, and the relevance of sector-specific capital management policies.
- Published
- 2017