Intra & Inter-Regional Industry Shocks: A New Metric with an Application to Australasian Currency Union

Arthur Grimes

No 292886, Motu Working Papers from Motu Economic and Public Policy Research

Abstract: We place regional industry structures at centre stage in currency union analysis, decomposing differences between regional and aggregate cycles into "industry structure" and "industry cycle" effects. The industry structure effect indicates whether a region's industry structure causes its cycle to deviate from the aggregate; the industry cycle effect indicates the importance of region-specific shocks in causing a deviation between cycles. We apply the methodology to Australasia. One region, ACT, has a material industry structure effect arising from its heavy central government concentration. No other region has a material industry structure effect; their cycles differ from the aggregate due to region-specific shocks.

Keywords: Industrial; Organization (search for similar items in EconPapers)
Pages: 27
Date: 2005-05
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Persistent link: https://EconPapers.repec.org/RePEc:ags:motuwp:292886

DOI: 10.22004/ag.econ.292886

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