In an open economy inflation-targeting framework, whether policy-makers should target aggregate or non-traded inflation depends on the structural relationships in the economy. This paper shows that in a small empirical model of the Australian economy, it makes little difference which measure is...

Standard trade theory suggests that internationalisation of an economy should lead to increased competitive pressures and an improvement in the efficiency with which domestic goods are produced and priced. We examine a number of ways in which the pricing behaviour of the Australian manufacturing...

The paper considers recent trends in the provision of finance and the factors that are likely to influence its future course. It emphasises how the interaction between the allocation of household wealth and the financing needs of firms shape the structure and evolution of financial systems. The...

We use time series techniques to examine the behaviour of Australia’s real exchange rate from 1969 to 1990. The real exchange rate exhibits non-stationary behaviour over this period, in contrast to simple purchasing power parity theory. We find weak evidence that the real exchange rate...

This paper develops several summary measures of the real exchange rate, based on the international price competitiveness of Australian exports. The concept of a real exchange rate is briefly discussed, as well as a number of methodological issues relating to the construction of exchange rate...