Abstract
Abstract. This paper investigates the direction of causation among income, price, exchange rates and money supply in Hong Kong. We use the Granger(1969, 1980) causality concept to find the existence of such a relationship. The paper presents the results of two separate bivariate analyses: on involving money and income, and the other involving money and exchange rates. A notable result to come out of the paper is that there is no causality relationship between them.
Keywords. Causality, Money, Income, Price, Exchange rates.
JEL. C01, C10.
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