CONFIDENTIAL
It is impossible not to be impressed by the fact that the llong Kong economy has burgeoned in the context of an extreme perhaps even doctrinaire laissez-faire philosophy. Furthermore, it would not be easy to demonstrate that departures from that philosophy in the past would have yielded a more prosperous or stable economy than is found today.
事务
6. And yet a residual suspicion lingers on. Can it be that the Hong Kong economy is already more complex than.is allowed for in the straight-forward analysis of how a corrective mechanism works? Are money wages, consumption, export volumes etc. really so flexible in both directions as the analysis suggests? Do changes in money supply work through to changes in real magnitudes as smoothly as is implied? For most economies, the answer to these last two questions would be "no". But I am perfectly prepared to admit that Hong Kong displays in practice a quality of adaptability which greatly exceeds that of any economy that I am familiar with.
Quite possibly, a main driving
force is an aggressive, massively self-confident and massively successful entrepreneurial class, whose successes can be rationalised in terms reminiscent of the earlier chapters of one of the older economics text books.
7.
Be that as it may, there is no hope of securing acceptance of propositions about monetary management just because such propositions would be regarded as almost self-evident elsewhere. So how would one seek to argue a case for a greater availability of the tools of monetary management in Hong Kong?
In
8. Perhaps one would start from the proposition that money supply in Hong Kong is largely determined by the balance of trade (visibles plus invisibles) as influanced from time to time by capital movements. the context, this is regarded as an essential part of the automatic corrective process. But is it, for example, necessarily helpful to allow capital movements to have an automatic effect on the internal
'3 CONFIDENTIAL
STIAL
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