The Effects of International Shocks on Australia's Business Cycle

Philip Liu ()

The Economic Record, 2010, vol. 86, issue 275, 486-503

Abstract: This article examines the sources of Australia's business cycle fluctuations. The cyclical component of gross domestic product is extracted using the Beveridge–Nelson decomposition and a structural Vector autoregressive model (VAR) model is identified using robust sign restrictions derived from a structural small open economy model. In contrast to previous VAR studies, international factors are found to contribute to over half of the output forecast errors whereas demand shocks have relatively modest effects.

Keywords: E32; E52; E63; F41 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (14)

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