EconPapers    
Economics at your fingertips  
 

A New Keynesian IS curve for Australia: is it forward looking or backward looking?

Antonio Paradiso (), Saten Kumar and B. Rao

Applied Economics, 2013, vol. 45, issue 26, 3691-3700

Abstract: This article estimates the forward looking, backward looking and an extended version of the New Keynesian IS curve for Australia. The validity of these models is investigated by imposing the constraint on real rate of interest as well as when the constraint is relaxed. Two measures of output gap, namely GAP1 (constructed using the unobserved components approach) and GAP2 (constructed using a quadratic trend) are utilized. Our results suggest that the baseline backward looking and forward looking models are overwhelmingly rejected by the data. This evidence strongly supports the extended backward looking model (with GAP2 ) being relevant for monetary policy analysis.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2012.718068 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: A New Keynesian IS Curve for Australia: Is it Forward Looking or Backward Looking? (2011) Downloads
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:taf:applec:v:45:y:2013:i:26:p:3691-3700

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2012.718068

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2020-08-08
Handle: RePEc:taf:applec:v:45:y:2013:i:26:p:3691-3700