The identification and transmission of international influences on Australia : an error-correction analysis

Bernie, Kris J. (1997). The identification and transmission of international influences on Australia : an error-correction analysis Honours Thesis, School of Economics, University of Queensland.

       
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Author Bernie, Kris J.
Thesis Title The identification and transmission of international influences on Australia : an error-correction analysis
School, Centre or Institute School of Economics
Institution University of Queensland
Publication date 1997
Thesis type Honours Thesis
Total pages 118
Language eng
Subjects 14 Economics
Formatted abstract The purpose of this thesis is to explain the recent synchronisation between the domestic and foreign growth cycles. This involves identifying the extent of the relationship with different measures of foreign GDP, as well as elaborating on the channels through which this influence operates. Identification of the dominant transmission mechanism is also given particular attention.

As the title suggests, the empirical component of this study involves the use of error correction analysis. The results of employing these techniques suggest that the US GDP enters the long-run relationship, and OECD GDP dominates the short-run relationship with Australian GDP. The terms of trade, demand for exports and the asset market are all channels that allow some influence, but are not the dominant channels. Business confidence was not supported empirically, but doubts as to the validity of these inferences arise. Support is provided for expectations of an interdependent world economy being the dominant transmission mechanism.

 
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Created: Tue, 23 Nov 2010, 13:07:44 EST by Muhammad Noman Ali on behalf of The University of Queensland Library