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Conference Paper
Financial reform: the Australian experience
Journal Article
Financial reform in Australia and New Zealand
Working Paper
An analysis of the welfare implications of alternative exchange rate regimes: an intertemporal model with an application
We construct a two-period model of an open economy and use the model to analyze the welfare implications of fixed and floating exchange regimes. Consumers have perfect foresight and save by holding domestic and foreign bonds, which are chosen according to relative interest rates, deflated by the rate of devaluation of the domestic currency. The government produces a pure public good and finances its deficits by issuing money, domestic bonds, and by foreign borrowing. The government's bonds compete with private investment, which is entirely debt financed. Foreign exchange, i.e., foreign bonds, ...
Journal Article
Macroeconomic shocks and business cycles in Australia
A small vector autoregression model is estimated to assess how demand and supply shocks influence Australian output and price behavior. The model is identified by assuming that aggregate demand shocks have transitory effects on output, while aggregate supply shocks have permanent effects. The paper describes how Australian macroeconomic variables respond to demand and supply shocks in the short run and in the long run. It also finds that demand shocks are dominant in determining fluctuations in Australian output at a one-quarter horizon, but supply shocks assume the larger role at longer ...
Journal Article
Ups and downs, down under
Working Paper
Financial aggregates as conditioning information for Australian output and inflation
This paper examines whether financial aggregates provide information useful for predicting real output growth and inflation, extending the inquiry conducted in Tallman and Chandra (1996). First, we investigate whether perfect knowledge of the future values of financial aggregates helps improve significantly the forecasting accuracy of output and inflation in a simple vector autoregression framework. The results display only one notable improvement to the forecasts with the addition of perfect information on the financial aggregates?future information on credit growth helps improve the ...
Working Paper
Forecasting Australian monetary aggregates