A currency union for Hong Kong and Mainland China?

Research output: Journal article publicationJournal articleAcademic researchpeer-review

14 Citations (Scopus)


This paper investigates the degree and the evolution of business cycle synchronization between Hong Kong SAR and Mainland China, as well as Hong Kong SAR and the United States with a two-step procedure. A structural VAR model is first set up to capture the dynamics of shocks to different regions. Then a state-space model is used to gauge the degree of symmetry of regional shocks, and to examine whether business cycles have been more synchronized over time. Our results cast doubt on the feasibility of a currency union between Hong Kong and Mainland China in the foreseeable future.
Original languageEnglish
Pages (from-to)894-911
Number of pages18
JournalJournal of International Money and Finance
Issue number6
Publication statusPublished - 1 Oct 2006


  • Business cycle synchronization
  • China
  • Hong Kong
  • State-space model
  • Structural VAR

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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