EconPapers    
Economics at your fingertips  
 

Asymmetry and Duration Dependence in Australian GDP and Unemployment

Philip Bodman

The Economic Record, 1998, vol. 74, issue 227, 399-411

Abstract: The periodic structure of business cycles suggests that significant asymmetries are present over different phases of the cycle. This paper uses markov regime‐switching models with fixed and duration dependent trasition probabilities to directly model expansions, contractions and durations in Australian GDP growth and unemployment growth. Evidence is found of significant asymmetry in growth rates across expansions and contractions for both series. GDP contractions exhibit duration dependence implying that as output recessions age the likelihood of switching into an expansion phase increases. Unemployment growth does not exhibit duration dependence in either phase. Evidence is also presented that non‐linearities in unemployment growth are well explained by the asymmetries in the GDP growth cycle. The analysis suggests that recessions are periods of rapid and intense job destruction, that Australian unemployment tends to ratchet up in recessionary periods and, in contrast to US and UK studies, that shocks to Australian unemployment growth are more persistent in recessions than expansions.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
https://doi.org/10.1111/j.1475-4932.1998.tb01934.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ecorec:v:74:y:1998:i:227:p:399-411

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0249

Access Statistics for this article

The Economic Record is currently edited by Paul Miller, Glenn Otto and Martin Richardson

More articles in The Economic Record from The Economic Society of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-03-19
Handle: RePEc:bla:ecorec:v:74:y:1998:i:227:p:399-411