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February 8, 2010

Hong Kong and China and the Global Recession

By Janet L. Yellen

Hong Kong and China are recovering impressively from global recession thanks to effective stimulus programs. But authorities worry that expansionary U.S. monetary policy may fuel asset bubbles in their economies. In the long run, the recession may nudge China toward increased domestic consumption by highlighting the risks of export-driven development. This Letter is adapted from a report by the president and CEO of the Federal Reserve Bank of San Francisco on her visit to Hong Kong and China November 15-21, 2009.

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– 2010

– 2009

38 Bank Relationships and the Depth of the Current Economic Crisis
Caballero • Candelaria • Hale :: December 14
37 Capital Structure in Banking
Kwan :: December 7
36 Linkages between Monetary and Regulatory Policy: Lessons from the Crisis
Yellen :: November 23
35 Talking about Tomorrow's Monetary Policy Today
Chehal • Trehan :: November 9
34 Inflation Expectations and the Risk of Deflation
Christensen :: November 2
33 Recent Developments in Mortgage Finance
Krainer :: October 26
32 Gauging Aggregate Credit Market Conditions
Lopez :: October 19
31 Disagreement about the Inflation Outlook
Leduc • Rudebusch • Weidner :: October 5
30 Predicting Crises, Part II: Did Anything Matter (to Everybody)?
Rose • Spiegel :: September 28
29 Predicting Crises, Part I: Do Coming Crises Cast Their Shadows Before?
Trehan :: September 21
28 New Highs in Unemployment Insurance Claims
Cleary • Kwok • Valletta :: September 8
27 Credit Market Conditions and the Use of Bank Lines of Credit
James :: August 31
26 Growth Accounting, Potential Output, and the Current Recession
Fernald • Matoba :: August 17
25 Have the Fed Liquidity Facilities Had an Effect on Libor?
Christensen :: August 10
24 Did Welfare Reform Work for Everyone? A Look at Young Single Mothers
Daly • Kwok :: August 3
23 Macroeconomic Models for Monetary Policy: Conference Summary
Swanson :: July 20
22 A View of the Economic Crisis and the Federal Reserve's Response
Yellen :: July 6
21 Employer Health Benefits and Insurance Expansions: Hawaii's Experience
Buchmueller • DiNardo • Valletta :: June 29
20 Fighting Downturns with Fiscal Policy
Leduc :: June 19
19 How Big Is the Output Gap?
Weidner • Williams :: June 12
18 Jobless Recovery Redux?
Daly • Hobijn • Kwok :: June 5
17 The Fed's Monetary Policy Response to the Current Crisis
Rudebusch :: May 22
16 U.S. Household Deleveraging and Future Consumption Growth
Glick • Lansing :: May 15
15 A Minsky Meltdown: Lessons for Central Bankers
Yellen :: May 1
14 Are Fiscal Stimulus Funds Going to the "Right" States?
Wilson :: April 17
13 Interprovincial Inequality in China
Candelaria • Daly • Hale :: April 10 :: Pacific Basin Notes
12 The Risk of Deflation
Williams :: March 27
11 The Outlook for Productivity Growth: Symposium Summary
Doms :: March 20 :: CSIP Notes
10 2008 Annual Pacific Basin Conference: Summary
Glick :: March 13 :: Pacific Basin Notes
09 How Will a Credit Crunch Affect Small Business Finance?
Udell :: March 6
08 Tax Credits for Job Creation and Retention: What Can We Learn from the States?
Wilson • Notzon :: February 20
07 Out-of-Market Small Business Loans
Laderman :: February 13
06 House Prices and Bank Loan Performance
Krainer :: February 6
05 Labor Supply Responses to Changes in Wealth and Credit
Daly • Hobijn • Kwok :: January 30
04 Behavior of Libor in the Current Financial Crisis
Kwan :: January 23
03 The Tech Pulse Index: Recent Trends in Tech-Sector Activity
Hobijn :: January 14 :: CSIP Notes
01-02 U.S. Monetary Policy Objectives in the Short and Long Run
Yellen :: January 9

+ 2008

38 Economic Conditions in Korea and Japan: A Monetary Policymaker's Report
Yellen :: December 19 :: Pacific Basin Notes
37 Convergence of Long-Term Bond Yields in the Euro Area
Swanson :: November 21
35-36 The Mortgage Meltdown, Financial Markets, and the Economy
Yellen :: November 7
34 Monetary Policy and Asset Prices
Lansing :: October 31
33 What Is Liquidity Risk?
Lopez :: October 24
32 Sectoral Reallocation and Unemployment
Valletta • Cleary :: October 17
31 Oil Prices and Inflation
Cavallo :: October 3
30 The EMU Effect on the Currency Denomination of International Bonds
Hale • Spiegel :: September 26
28-29 The U.S. Economic Situation and the Challenges for Monetary Policy
Yellen :: September 19
27 Summer Reading: New Research in Applied Microeconomics Conference Summary
Doms :: September 5
26 Regional Variation in the Potential Economic Effects of Climate Change
Butsic • Hanak • Valletta :: August 22
25 Treasury Bond Yields and Long-Run Inflation Expectations
Christensen :: August 15
24 How and Why Does Age at Kindergarten Entry Matter?
Cascio :: August 8
23 Unanchored Expectations? Interpreting the Evidence from Inflation Surveys
Huang • Trehan :: July 25
22 Can Young Americans Compete in a Global Economy?
Cascio :: July 18
21 Monetary Policy and Asset Markets: Conference Summary
Dennis :: July 11
20 Research on the Effects of Fiscal Stimulus: Symposium Summary
Wilson :: July 3 :: CSIP Notes
19 Consumer Sentiment and Consumer Spending
Wilcox :: June 27
18 Speculative Bubbles and Overreaction to Technological Innovation
Lansing :: June 20
17 Did Large Recalls of Chinese Consumer Goods Lower U.S. Imports from China?
Candelaria • Hale :: June 13 :: Pacific Basin Notes
16 Retirement Savings and Decision Errors: Lessons from Behavioral Economics
Armour • Daly :: June 6
15 Small Business Lending and Bank Competition
Laderman :: May 9
13-14 The Financial Markets, Housing, and the Economy
Yellen :: April 18
12 Are Global Imbalances Due to Financial Underdevelopment in Emerging Economies?
Valderrama :: April 11 :: Pacific Basin Notes
11 Falling House Prices and Rising Time on the Market
Krainer :: March 21
10 The Corporate Bond Credit Spread Puzzle
Christensen :: March 14
09 Assessing Employment Growth in 2007
Regev :: March 7
08 The Economics of Private Equity Investments: Symposium Summary
Lopez :: February 29 :: CSIP Notes
07 Economic Conditions in Singapore and Vietnam: A Monetary Policymaker's Report
Yellen :: February 22 :: Pacific Basin Notes
06 Recent Trends in Economic Volatility: Conference Summary
Notzon • Wilson :: February 15 :: CSIP Notes
04-05 Prospects for the Economy in 2008
Yellen :: February 8
03 2007 Annual Pacific Basin Conference: Summary
Glick :: February 1 :: Pacific Basin Notes
02 Publishing Central Bank Interest Rate Forecasts
Rudebusch :: January 25
01 Publishing FOMC Economic Forecasts
Rudebusch :: January 18

+ 2007

38 Sovereign Wealth Funds: Stumbling Blocks or Stepping Stones to Financial Globalization?
Aizenman • Glick :: December 14 :: Pacific Basin Notes
36-37 The U.S. Economy and Monetary Policy
Yellen :: December 7
35 Fixing the New Keynesian Phillips Curve
Dennis :: November 30
34 Financial Globalization and Monetary Policy
Spiegel :: November 23 :: Pacific Basin Notes
33 Labor Force Participation and the Prospects for U.S. Growth
Daly • Regev :: November 2
32 Asset Price Bubbles
Lansing :: October 26
31 Corporate Access to External Financing
Lopez :: October 19
30 Relative Comparisons and Economics: Empirical Evidence
Daly • Wilson :: October 5
29 Internal Risk Models and the Estimation of Default Probabilities
Christensen :: September 28
28 Changes in Income Inequality across the U.S.
Regev • Wilson :: September 21
26-27 Recent Financial Developments and the U.S. Economic Outlook
Yellen :: September 14
25 Changing Productivity Trends
Trehan :: August 31 :: CSIP Notes
24 Are Global Prices Converging or Diverging?
Glick :: August 10 :: Pacific Basin Notes
23 Trends in Bay Area IT Employment
Hsueh :: August 3 :: CSIP Notes
22 Regional Economic Conditions and Community Bank Performance
Furlong • Krainer :: July 27
21 What We Do and Don't Know about the Term Premium
Swanson :: July 20
19-20 The U.S. Economy and Monetary Policy
Yellen :: July 13 :: Pacific Basin Notes
18 The Costs and Value of New Medical Technologies: Symposium Summary
Valletta :: July 6 :: CSIP Notes
17 The Narrowing of the Male-Female Wage Gap
Doms • Lewis :: June 29
16 Credit Unions, Conversions, and Capital
Wilcox :: June 22
15 On Forecasting Future Monetary Policy: Has Forward-Looking Language Mattered?
Kwan :: June 15
14 House Prices and Subprime Mortgage Delinquencies
Doms • Furlong • Krainer :: June 8
13 Anxious Workers
Valletta :: June 1
12 Monetary Policy, Transparency, and Credibility: Conference Summary
Dennis • Williams :: May 25
11 U.S. Supervisory Standards for Operational Risk Management
Lopez :: May 4
10 Do Monetary Aggregates Help Forecast Inflation?
Hale • Jorda :: April 13
09 Will Fast Productivity Growth Persist?
Fernald • Thipphavong • Trehan :: April 6 :: CSIP Notes
08 The U.S. Productivity Acceleration and the Current Account Deficit
Valderrama :: March 30 both
07 Prospects for China's Corporate Bond Market
Hale :: March 16 :: Pacific Basin Notes
06 Update on China: A Monetary Policymaker's Report
Yellen :: March 9 :: Pacific Basin Notes
05 Financial Innovations and the Real Economy: Conference Summary
Doms • Fernald • Lopez :: March 2 :: CSIP Notes
04 2006 Annual Pacific Basin Conference: Summary
Glick :: February 9 :: Pacific Basin Notes
03 Monetary Policy Inertia and Recent Fed Actions
Rudebusch :: January 26
02 Disentangling the Wealth Effect: Some International Evidence
Sierminska • Takhtamanova :: January 19
01 Concentrations in Commercial Real Estate Lending
Lopez :: January 5

+ 2006

38 Mortgage Innovation and Consumer Choice
Krainer :: December 29
37 Will Moderating Growth Reduce Inflation?
Lansing :: December 22
36 The Geographic Scope of Small Business Lending: Evidence from the San Francisco Market
Laderman :: December 15
35 The Mystery of Falling State Corporate Income Taxes
Wilson :: December 8
33-34 Economic Inequality in the United States
Yellen :: December 1
32 Is a Recession Imminent?
Fernald • Trehan :: November 24
31 Interest Rates, Carry Trades, and Exchange Rate Movements
Cavallo :: November 17 :: Pacific Basin Notes
30 The Rise in Homeownership
Doms • Motika :: November 3
29 What Are the Risks to the United States of a Current Account Reversal?
Valderrama :: October 27
28 Did Quantitative Easing by the Bank of Japan "Work"?
Spiegel :: October 20 :: Pacific Basin Notes
27 Inflation Persistence in an Era of Well-Anchored Inflation Expectations
Williams :: October 13
26 Safe and Sound Banking, 20 Years Later
Kwan :: October 6
25 Health Insurance Costs and Declining Coverage
Buchmueller • Valletta :: September 29
24 Oil Prices and the U.S. Trade Deficit
Cavallo :: September 22
23 The Exchange Rate-Consumer Price Puzzle
Valderrama :: September 15
22 Inflation Targets and Inflation Expectations: Some Evidence from the Recent Oil Shocks
Trehan • Tjosvold :: September 1
21 New Uses for New Macro Derivatives
Wolfers :: August 25
20 Would an Inflation Target Help Anchor U.S. Inflation Expectations?
Swanson :: August 11
19 Performance Divergence of Large and Small Credit Unions
Wilcox :: August 4
18 Property Debt Burdens
Doms • Motika :: July 28
17 Labor Markets and the Macroeconomy: Conference Summary
Dennis • Williams :: July 21
16 A Monetary Policymaker's Passage to India
Yellen :: July 7
15 Residential Investment over the Real Estate Cycle
Krainer :: June 30
14 International Financial Integration and the Current Account Balance
Cavallo :: June 23
12-13 Monetary Policy in a Global Environment
Yellen :: June 2
11 Central Bank Capital, Financial Strength, and the Bank of Japan
Cargill :: May 19 :: Pacific Basin Notes
10 Bank Diversification, Economic Diversification?
Strahan :: May 12
09 Prospects for the Economy
Yellen :: April 28
08 Job Matching: Evidence from the Beveridge Curve
Valletta • Hodges :: April 21
07 Security Analysts and Regulatory Reform
Marquez :: April 14
06 What Is the Federal Reserve Banks' Imputed Cost of Equity Capital?
Barnes • Lopez :: April 7
05 Enhancing Fed Credibility
Yellen :: March 17
04 External Imbalances and Adjustment in the Pacific Basin: Conference Summary
Glick • Spiegel :: March 10 :: Pacific Basin Notes
03 Postal Savings in Japan and Mortgage Markets in the U.S.
Cargill • Scott :: March 3 :: Pacific Basin Notes
02 Productivity Growth: Causes and Consequences--Conference Summary
Wilson :: February 24 :: CSIP Notes
01 2006: A Year of Transition at the Federal Reserve
Yellen :: January 27

+ 2005

38 Do Oil Futures Prices Help Predict Future Oil Prices?
Wu • McCallum :: December 30
37 The Diffusion of Personal Computers across the U.S.
Doms :: December 23 :: CSIP Notes
36 Bank ATMs and ATM Surcharges
Gowrisankaran • Krainer :: December 16
35 Shifting Data: A Challenge for Monetary Policymakers
Fernald • Wang :: December 9
34 Recent Policy Issues Regarding Credit Risk Transfer
Lopez :: December 2
33 Uncertainty and Monetary Policy
Dennis :: November 30
32 The Bretton Woods System: Are We Experiencing a Revival? Symposium Summary
Glick • Spiegel :: November 25 :: Pacific Basin Notes
31 Why Hasn't the Jump in Oil Prices Led to a Recession?
Fernald • Trehan :: November 18
30 Spendthrift Nation
Lansing :: November 10
29 Economies of Scale and Continuing Consolidation of Credit Unions
Wilcox :: November 4
28 Oil Price Shocks and Inflation
Trehan :: October 28
27 Estimating the "Neutral" Real Interest Rate in Real Time
Wu :: October 21
26 The Rise and Spread of State R&D Tax Credits
Wilson :: October 14 :: CSIP Notes
25 Inflation Expectations: How the Market Speaks
Kwan :: October 7
24 Why Has Output Become Less Volatile?
Trehan :: September 16
23 A Look at China's New Exchange Rate Regime
Spiegel :: September 9 :: Pacific Basin Notes
22 Policymaking on the FOMC: Transparency and Continuity
Yellen :: September 2
21 Housing Markets and Demographics
Krainer :: August 26
20 Credit Union Failures and Insurance Fund Losses: 1971-2004
Wilcox :: August 19
19 Does Europe's Path to Monetary Union Provide Lessons for East Asia?
Glick :: August 12 :: Pacific Basin Notes
18 Monetary Policy and Asset Price Bubbles
Rudebusch :: August 5
17 What If Foreign Governments Diversified Their Reserves?
Valderrama :: July 29 :: Pacific Basin Notes
16 Understanding the Twin Deficits: New Approaches, New Results
Cavallo :: July 22
15 Age and Education Effects on the Unemployment Rate
Valletta • Hodges :: July 15
14 Stress Tests: Useful Complements to Financial Risk Models
Lopez :: June 24
13 IT Investment: Will the Glory Days Ever Return?
Doms :: June 17 :: CSIP Notes
12 Fiscal and Monetary Policy: Conference Summary
Dennis • Williams :: June 10
11 Are State R&D Tax Credits Constitutional? An Economic Perspective
Wilson :: June 3 :: CSIP Notes
10 More Life vs. More Goods: Explaining Rising Health Expenditures
Jones :: May 27
09 Can Monetary Policy Influence Long-term Interest Rates?
Jorda :: May 20
08 The Long-term Interest Rate Conundrum: Not Unraveled Yet?
Wu :: April 29
07 A Tale of Two Monetary Policies: Korea and Japan
Cargill :: April 15 :: Pacific Basin Notes
06 Financial liberalization: How well has it worked for developing countries?
Aizenman :: April 8
05 Gains in U.S. Productivity: Stopgap Measures or Lasting Change?
Daly • Furlong :: March 11 :: CSIP Notes
04 Productivity and Inflation
Yellen :: February 18
03 Emerging Markets and Macroeconomic Volatility: Conference Summary
Glick • Valderrama :: February 4 :: Pacific Basin Notes
02 Help-Wanted Advertising and Job Vacancies
Valletta :: January 21
01 To Float or Not to Float? Exchange Rate Regimes and Shocks
Cavallo :: January 7 :: Pacific Basin Notes

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Opinions expressed in FRBSF Economic Letter do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System. This publication is edited by Sam Zuckerman and Anita Todd. Permission to reprint must be obtained in writing. Please send editorial comments and requests for reprint permission to:
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