The 2000s was a particularly eventful decade for both the international and Australian economies. There were: two recessions in many countries; the largest international financial crisis since the Great Depression; the ongoing rapid development of Asia; asset booms and busts; and, Australia...

This paper develops an empirical model of the cross-country variation in bilateral output growth correlations for 17 OECD countries. Consideration is given to the role played by explicit mechanisms for transmitting shocks between countries, such as trade in goods and financial assets and the...

This paper investigates the link between international financial integration and economic growth. In particular, we ask the following questions. What are the theoretical links between financial integration and growth? Is there any empirical evidence that an increase in financial integration is...

This paper documents the clear change of view, which has taken place in Australia over the past three decades or so, concerning the relevance of the current account deficit for policy. Historical experience under a fixed exchange rate regime suggested that large persistent deficits were...

We use a structural vector autoregression model to characterise the aggregate and industry effects of exchange rate movements on the Australian economy. We find that a temporary 10 per cent appreciation of the real exchange rate that is unrelated to the terms of trade or interest rate...

The terms of trade are subject to both permanent and transitory shocks. Particularly for commodity-producing small open economies, it is sometimes argued that the inability of agents to determine which of these shocks are permanent and which are transitory leads to more macroeconomic volatility...