The Australian Business Cycle: Job Palooka or Dead Cat Bounce?

Philip Bodman and Mark Crosby

No 649, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: We address the question of whether asymmetry in the business cycle and asymmetry in the persistence of negative versus positive shocks characteries Australian output growth. Using nonlinear time series models we provide evidence that suggests Australian output growth is characterised by three distinct phases: contractions, high growth recovery periods and "normal" or moderate growth periods. This implies that Australian output fluctuations have a significant transitory component and is supportive of the "output-gaps" view and "plucking" model view of economic fluctuations. In contrast to recent evidence for the US and Canada however, we find that Australian GDP growth does not exhibit important asymmetries in the responses of output growth to positive and negative shocks.

Keywords: BUSINESS CYCLES; BUSINESS CYCLES (search for similar items in EconPapers)
JEL-codes: C22 C51 C52 E32 (search for similar items in EconPapers)
Pages: 16 pages
Date: 1998
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Journal Article: The Australian Business Cycle: Joe Palooka or Dead Cat Bounce? (2002)
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