An estimated New Keynesian policy model for Australia

Daniel Buncic () and Martin Melecky ()

MPRA Paper from University Library of Munich, Germany

Abstract: An open economy New Keynesian policy model for Australia is estimated in this study. We investigate how important external shocks are as a source of macroeconomic fluctuations when compared to domestic ones. The results of our analysis suggest that the Australian business cycle and domestic inflation are most affected by domestic demand and supply shocks, respectively. However, domestic output also appears to be strongly affected by foreign demand shocks, and domestic inflation by exchange rate shocks. Domestic variables do not seem to be significantly affected by foreign supply and monetary policy shocks.

Keywords: New Keynesian Policy Modelling; Small Open Economy Model; Australia; US; Bayesian Estimation. (search for similar items in EconPapers)
JEL-codes: E40 E37 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Date: 2007-11-08
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Downloads: (external link)
http://mpra.ub.uni-muenchen.de/4138/ orginal version
http://mpra.ub.uni-muenchen.de/5671/ revised version

Related works:
Working Paper: An Estimated, New Keynesian Policy Model for Australia (2005)
Journal Article: An Estimated New Keynesian Policy Model for Australia (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:4138

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