Title: Estimating the Natural Rate of Unemployment in Hong Kong
Reference Number: 1085
Publication Date: May 2004

Petra Gerlach-Kristen
HK Institute of Economics and Business Strategy

This paper uses unobserved components analysis to estimate the natural rate of unemployment in Hong Kong. We assume that the natural rate follows a random walk and is a determinant of the Beveridge curve. We find that the natural rate has increased since the 1990s but nevertheless lies clearly below the actual rate of unemployment. This indicates that unemployment is likely to decrease in the near future.

Last modified: 05/21/2004