Modelling Recent Developments in Australian Asset Markets: Some Preliminary Results

J.G. Fahrer and R.W. Rankin
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J.G. Fahrer: Reserve Bank of Australia
R.W. Rankin: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: This paper represents a first attempt to model the macroeconomic implications of recent changes in Australian financial markets: the floating of the Australian dollar; the introduction of tendering for government bonds; and the deregulation of banking in August 1984. The RBII model is adapted to incorporate these changes, and subjected to a series of shocks in simulation. The results are used to illustrate the properties of the modified model. The conclusions suggest that the model’s behaviour is consistent with received theory; monetary control is facilitated and a form of the Fleming-Mundell result holds in the longer term. An earlier version of the paper was presented to the thirteenth Conference of Economists, Perth, August 1984.

Date: 1984-11
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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp8403

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