ABSTRACT
One can argue endlessly over assumptions and over which model should better describe the actual situation in Hong Kong, but it would be a pointless exercise. The relevance of a model is determined ultimately by how well its implications conform to and predict empirical observations, not by how closely its assumptions approximate reality. Any theory of the labour market that fails to explain dynamic behaviour in the real world can offer little insight of significance, no matter how plausible it seems on the surface.
