External Influences on Output: An Industry Analysis

Gordon de Brouwer and John Romalis
Additional contact information
Gordon de Brouwer: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: The correlation of Australian output with that of the OECD, and the United States in particular, has been well documented. This paper explores foreign linkages by looking at the production side of the national accounts for Australia and the United States, which is often characterised as the country at the technological frontier. Industrial structures in the two countries are broadly similar, and about two-thirds of Australian output is found to be linked to that of the United States. The US links in the agricultural and mining sectors seem to be related to aggregate demand in the United States, in both the short and long run. But in manufacturing – and notably in goods for which production is technology intensive and changing over time – there are persistent, long-run links with the corresponding sector in the United States. Combined with other evidence, the conjecture is that the US links in manufacturing are driven by the supply-side: technological change, innovation and new products are transmitted from the United States and elsewhere to Australia, mostly within two to three years. Domestic demand seems to dominate service sectors, although US aggregate demand can be relevant, as, for example, in the finance and property sector. While links with the United States are pervasive, domestic events and policies are shown to be important to economic outcomes, particularly in the short to medium term.

JEL-codes: C22 E32 F41 L60 O56 (search for similar items in EconPapers)
Date: 1996-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.rba.gov.au/publications/rdp/1996/pdf/rdp9612.pdf (application/pdf)

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:rba:rbardp:rdp9612

Access Statistics for this paper

More papers in RBA Research Discussion Papers from Reserve Bank of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Paula Drew ().