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Macroeconomic Fluctuations in the Australian Economy

Author

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  • Smith, Jeremy
  • Murphy, Chris

Abstract

This paper uses an error correction model of the Australian economy in an attempt to capture the major causes of fluctuations in the Australian economy over the past fifteen years. The model is shocked by each variable in turn and the responses to the shocks are traced out. The model concludes that real wage and domestic demand shocks account for most of the instability seen in Australia in the recent past with little of the variation due to world variable shocks. For comparative purposes, these responses are then compared with similar responses applied to a macroeconomic model of the Australian economy. Copyright 1994 by The Economic Society of Australia.

Suggested Citation

  • Smith, Jeremy & Murphy, Chris, 1994. "Macroeconomic Fluctuations in the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 70(209), pages 133-148, June.
  • Handle: RePEc:bla:ecorec:v:70:y:1994:i:209:p:133-48
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    References listed on IDEAS

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    1. Dornbusch, Rudiger, 1989. " Real Exchange Rates and Macroeconomics: A Selective Survey," Scandinavian Journal of Economics, Wiley Blackwell, pages 401-432.
    2. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", pages 106-135.
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    Cited by:

    1. Meredith Beechey & Pär Österholm, 2008. "A Bayesian Vector Autoregressive Model with Informative Steady-state Priors for the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 84(267), pages 449-465, December.
    2. Kearney, Colm & Daly, Kevin, 1997. "Monetary volatility and real output volatility: An empirical model of the financial transmission mechanism in Australia," International Review of Financial Analysis, Elsevier, pages 77-95.
    3. Enders, Walter & Hurn, Stan, 2002. "Asymmetric price adjustment and the Phillips curve," Journal of Macroeconomics, Elsevier, pages 395-412.
    4. Doucouliagos, Chris, 1997. "The Aggregate Demand for Labour in Australia: A Meta-analysis," Australian Economic Papers, Wiley Blackwell, vol. 36(69), pages 224-242, December.
    5. Gruen, David & Pagan, Adrian & Thompson, Christopher, 1999. "The Phillips curve in Australia," Journal of Monetary Economics, Elsevier, pages 223-258.
    6. David Gruen & Adrian Pagan & Christopher Thompson, 1999. "The Phillips Curve in Australia," RBA Research Discussion Papers rdp1999-01, Reserve Bank of Australia.
    7. Dungey, Mardi & Pagan, Adrian, 2000. "A Structural VAR Model of the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 76(235), pages 321-342, December.

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