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Regional Dimensions of the Australian Business Cycle

  • Robert Dixon
  • David Shepherd

This paper deals with the identification of, and explanations for, co-movement in regional business cycles using data for Australian states and territories (regions). We show that both raw growth rates and the deviations from a Hodrick-Prescott trend reflect noise in the series as well as any cycle but that it is possible to manipulate the deviations from a Hodrick-Prescott trend in a simple way so as to reveal its cyclical component. We measure the extent of co-movements in employment fluctuations amongst the regions. We find that cross-region correlations in employment cycles can be explained by regional industry structure and size while the noise component of regional fluctuations appears instead to be related to physical geography.

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Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 1088.

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Length: 32 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:mlb:wpaper:1088
Contact details of provider: Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia
Phone: +61 3 8344 5355
Fax: +61 3 8344 6899
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  17. BARRIOS, Salvador & DE LUCIO, Juan José, . "Economic integration and regional business cycles: evidence from the Iberian regions," CORE Discussion Papers RP 1655, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  18. Arthur Grimes, 2005. "Regional and Industry Cycles in Australasia: Implications for a Common Currency," Working Papers 05_04, Motu Economic and Public Policy Research.
  19. Artis, Michael J & Zhang, Wenda, 1999. "Further Evidence on the International Business Cycle and the ERM: Is There a European Business Cycle?," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 120-32, January.
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  22. Robert Dixon & David Shepherd, 2006. "The Cyclical Dynamics and Volatility of Australian Output and Employment," Department of Economics - Working Papers Series 968, The University of Melbourne.
  23. Dixon, Robert & Shepherd, David, 2001. "Trends and Cycles in Australian State and Territory Unemployment Rates," The Economic Record, The Economic Society of Australia, vol. 77(238), pages 252-69, September.
  24. Perron, P., 1994. "Further Evidence on Breaking Trend Functions in Macroeconomic Variables," Cahiers de recherche 9421, Universite de Montreal, Departement de sciences economiques.
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  28. Ron Martin, 1997. "Regional Unemployment Disparities and their Dynamics," Regional Studies, Taylor & Francis Journals, vol. 31(3), pages 237-252.
  29. Dixon, R. & Shepherd, D. & Thomson, J., 2000. "Regional Unemployment Disparities," Department of Economics - Working Papers Series 737, The University of Melbourne.
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  31. Poncet, Sandra & Barthélemy, Jean, 2008. "China as an Integrated Area?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 896-926.
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