02073cas a2200241 a 4500 AALejournalIMF006151 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451874020 1018-5941 BD-DhAAL BD-DhAAL N'Diaye, Papa. Macroeconomic Implications for Hong Kong SAR of Accommodative U.S. Monetary Policy / Papa N'Diaye. Washington, D.C. : International Monetary Fund, 2009. 1 online resource (15 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 This paper discusses the potential macroeconomic implications for Hong Kong SAR of accommodative monetary policy in the United States. It shows, through model simulations, that a resumption of the credit channel in Hong Kong SAR has the potential to create inflation in both goods and asset markets. Expansionary financial conditions will likely have a greater impact in fueling asset price inflation, manifested in the model through a strong increase in equity prices. Higher asset prices could, in turn, through a financial accelerator mechanism, lead to further credit expansion and an upward cycle of asset prices and credit. This cycle, if unchecked, can potentially feed into volatility in consumption, output and employment and complicate macroeconomic management. The simulation results suggest there is a role for countercyclical prudential regulations to mitigate the amplitude of the cycle and lessen the financial and macroeconomic volatility associated with an unwinding of the credit-asset price cycle. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2009/256 Full text available on IMF http://elibrary.imf.org/view/journals/001/2009/256/001.2009.issue-256-en.xml IMF e-Library