Intra & Inter-Regional Shocks: A New Metric with an Application to Australasian Currency Union
AbstractWe place regional industry structures at centre stage in currency union analysis, decomposing differences between regional and aggregate cycles into "industry structure" and "industry cycle" effects. The industry structure effect indicates whether a region's industry structure causes its cycle to deviate from the aggregate; the industry cycle effect indicates the importance of region-specific shocks in causing a deviation between cycles. We apply the methodology to Australasia. One region, ACT, has a material industry structure effect arising from its heavy central government concentration. No other region has a material industry structure effect; their cycles differ from the aggregate due to region-specific shocks.
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Bibliographic InfoPaper provided by Motu Economic and Public Policy Research in its series Working Papers with number 05_03.
Length: 27 pages
Date of creation: May 2005
Date of revision:
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
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