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This paper examines the causes of deflation in Hong Kong SAR, exploring whether it reflects a prolonged process of adjustment to cyclical shocks or whether it results from price equalization pressures arising from structural integration with mainland China. To gauge the relative importance of these factors, the paper provides both an econometric and a qualitative analysis of the price dynamics between Hong Kong SAR and Shenzhen, a neighboring city in mainland China. It finds that the role of price equalization as a source of deflation is minor. Deflation in Hong Kong SAR is best explained by successive cyclical shocks which have been amplified by balance-sheet and wealth effects.

Foreign Exchange --- Inflation --- Macroeconomics --- Real Estate --- Price Level --- Deflation --- Macroeconomic Aspects of International Trade and Finance: General --- Nonagricultural and Nonresidential Real Estate Markets --- Currency --- Foreign exchange --- Property & real estate --- Nominal effective exchange rate --- Land prices --- Consumer price indexes --- Prices --- Asset prices --- Housing --- Price indexes --- Hong Kong Special Administrative Region, People's Republic of China

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This paper analyzes the behavior of current account deficits in Africa and estimates whether the deficits are excessive with respect to fundamentals. The findings are the deficits are (i) not very persistent; (ii) positively linked with domestic growth; (iii) strongly linked with public (and private) savings, suggesting that fiscal consolidation in IMF-supported programs may be relatively effective; (iv) linked with aid flows, so as to close the external gap, and (v) linked with currency depreciation and the terms of trade. The deficit is "excessive," as it is almost 3 percent of the gross national disposable income above the equilibrium level.

Exports and Imports --- Macroeconomics --- International Finance: General --- Current Account Adjustment --- Short-term Capital Movements --- Macroeconomic Aspects of International Trade and Finance: General --- Macroeconomics: Consumption --- Saving --- Wealth --- Empirical Studies of Trade --- International economics --- Current account deficits --- Current account --- Private savings --- Terms of trade --- Current account balance --- Balance of payments --- National accounts --- International trade --- Saving and investment --- Economic policy --- nternational cooperation --- Sierra Leone

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This paper assesses the policy significance of foreign liabilities and the current account deficits that give rise to them. Current account imbalances are shown to have some capacity to indicate difficulties elsewhere in the economy, but are imperfect indicators and subject to potential misinterpretation. The paper concludes that successful pursuit of internal balance could be an important factor in stabilizing current account balances, but, beyond that, there seems no good reason for using macroeconomic policy to target the current account as such. However, there may be grounds for microeconomic action to remedy specifically identified problems.

Exports and Imports --- Public Finance --- Current Account Adjustment --- Short-term Capital Movements --- International Lending and Debt Problems --- Debt --- Debt Management --- Sovereign Debt --- Macroeconomic Aspects of International Trade and Finance: General --- International economics --- Public finance & taxation --- Current account deficits --- Current account --- Current account balance --- External debt --- Government debt management --- Balance of payments --- Public financial management (PFM) --- Debts, External --- Debts, Public --- Australia

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This paper discusses Russia’s balance of payments developments in recent years: the initial macroeconomic imbalances and systemic shocks which set the stage for the critical balance of payments difficulties Russia faced in the early 1990s; the lessons from the early phases of Russia’s economic reforms; the choices faced by the Russian Government and the international community in supporting the government’s reform efforts; and the external debt situation. This analysis also points to external adjustment issues which Russia will face in the period ahead, including the potential for an early reversal of the export decline and the nature of external financing and debt problems.

Exports and Imports --- Foreign Exchange --- Socialist Systems and Transitional Economies: General --- Current Account Adjustment --- Short-term Capital Movements --- Macroeconomic Aspects of International Trade and Finance: General --- Trade: General --- International Lending and Debt Problems --- International economics --- Currency --- Foreign exchange --- Exports --- External debt --- Imports --- Debt service --- International trade --- Debts, External --- Russian Federation

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This paper studies the behavior of interest rate differentials in Mexico during the 1992-94 period. It shows that the currency risk premia is positively related to the share of peso denominated debt in total debt and that the magnitude of this effect is considerable. For every 1 percentage point increase in the ratio of peso denominated debt in total debt, the interest rate differential increases between 20 and 30 basis points. In light of this result, and to get a better measure of the expectation of a devaluation during the period, the observed interest rate differential is adjusted for the change in the composition of public debt. In contrast to the behavior of the interest rate differential, the adjusted measure remained at extremely high levels throughout 1994, signalling a low level of confidence in the announced currency band.

Foreign Exchange --- Investments: General --- Money and Monetary Policy --- Interest Rates: Determination, Term Structure, and Effects --- Macroeconomic Aspects of International Trade and Finance: General --- Open Economy Macroeconomics --- Investment --- Capital --- Intangible Capital --- Capacity --- Monetary Systems --- Standards --- Regimes --- Government and the Monetary System --- Payment Systems --- Macroeconomics --- Currency --- Foreign exchange --- Monetary economics --- Return on investment --- Currencies --- Exchange rates --- Crawling peg --- Depreciation --- National accounts --- Money --- Saving and investment --- Mexico