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Output Composition of the Monetary Policy Transmission Mechanism: Is Australia Different?

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  • Tuan Phan

Abstract

type="main" xml:id="ecor12121-abs-0001"> This article compares the output composition of the monetary policy transmission mechanism in Australia to that for the Euro area and the USA. Four vector autoregressive (VAR) models are used to estimate the contributions of private consumption and investment to output reactions resulting from nominal interest rate shocks for the period 1982Q3–2007Q4. The results suggest that the investment channel plays a more important role than the consumption channel in Australia, while the contributions of the two channels are indistinguishable in the Euro area and the USA. The difference between Australia and the Euro area comes from differences in housing investment responses, whereas Australia is different to the USA mainly because it has a lower share of household consumption in total demand.

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  • Tuan Phan, 2014. "Output Composition of the Monetary Policy Transmission Mechanism: Is Australia Different?," The Economic Record, The Economic Society of Australia, vol. 90(290), pages 382-399, September.
    • Handle: RePEc:bla:ecorec:v:90:y:2014:i:290:p:382-399
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    File URL: http://hdl.handle.net/10.1111/ecor.2014.90.issue-290
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    3. Georgiadis, Georgios & Jančoková, Martina, 2020. "Financial globalisation, monetary policy spillovers and macro-modelling: Tales from 1001 shocks," Journal of Economic Dynamics and Control, Elsevier, vol. 121(C).
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    7. Chuluunbayar, Delgerjargal, 2019. "Output Composition of Monetary Policy Transmission in Mongolia," MPRA Paper 98111, University Library of Munich, Germany.
    8. Benjamin Beckers, 2020. "Credit Spreads, Monetary Policy and the Price Puzzle," RBA Research Discussion Papers rdp2020-01, Reserve Bank of Australia.

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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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