01805cas a2200241 a 4500 AALejournalIMF005503 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451871432 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. The Impact of Introducing a Minimum Wage on Business Cycle Volatility : A Structural Analysis for Hong Kong SAR. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (54 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students We study the impact of a minimum wage on business cycle volatility, depending upon its coverage and adjustment mechanism. As with other small open economies, Hong Kong SAR is vulnerable to external shocks, with its exchange rate regime precluding active monetary policy. Adjustment to past shocks has relied on flexible domestic prices. We find that a minimum wage affecting 20 percent of employees would amplify output volatility by 0.2 percent to 9.2 percent, and employment volatility by ?1.2 percent to 7.8 percent. A fixed wage or indexation to consumption price inflation increases volatility most. Indexation to wage inflation or unit labor cost growth is preferable, largely preserving labor market flexibility. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2008/285 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/285/001.2008.issue-285-en.xml IMF e-Library