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Regional Dimensions of the Australian Business Cycle

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  • Robert Dixon
  • David Shepherd

Abstract

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.

Suggested Citation

  • Robert Dixon & David Shepherd, 2009. "Regional Dimensions of the Australian Business Cycle," Department of Economics - Working Papers Series 1088, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:1088
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    File URL: http://fbe.unimelb.edu.au/__data/assets/pdf_file/0007/801178/1088.pdf
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    References listed on IDEAS

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    Cited by:

    1. Celia Melguizo, 2017. "An analysis of Okun’s law for the Spanish provinces," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 37(1), pages 59-90, February.

    More about this item

    Keywords

    Regional Employment; Business Cycles; Autoregressive Modelling; Co-Movement;

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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