It is frequently argued that an increase in the rate of growth of money or credit will lead to an increase in economic activity. This paper addresses this issue by looking at the lead/lag relationship between a range of financial aggregates and several measures of economic activity for Australia...

This paper focusses on the empirical relationship between financial indicators (monetary and credit aggregates and short-term interest rates) and measures of economic activity. It aims to supplement an earlier paper by Bullock, Morris and Stevens (1988) (BMS), which explored these issues. BMS...

This paper adopts a simple econometric approach to estimate the effects of exchange rate changes on the rate of inflation in Australia. It uses a mark-up model of price determination, in which output costs are determined by input prices. The analysis suggests that imported cost pressures have...

This paper is part of a larger project which looks at monetary policy and the economy. The object of the present paper is to serve as an introduction to and description of some key empirical regularities, without seeking to describe how monetary policy exerts its influence, or how this may have...

This paper outlines the inflation objective for monetary policy in Australia, which we describe as seeking to achieve a broad central tendency for inflation of between 2 and 3 per cent over the long run – a “thick point” – rather than a narrow target band. It also provides a more...

This paper reports estimation and testing of general lag formulations of demand for M1, M3 and broad money (BM) using new data for the own rates of return on money. Own rate effects have become more important in the recently-deregulated financial environment. Own interest rates are found to be...

Automated teller machine (ATM) networks are a key component of payments systems. A number of competing theoretical models have been developed to examine fees associated with ATM transactions. A common feature of these models is that they imply that the elimination of interchange fees will cause...

Historical experience shows that disruptions in credit markets can have a material impact on activity and inflation. However, it is hard to measure such effects owing to the difficulty in isolating credit supply shocks. This paper employs survey data to identify the impact of credit supply...

We examine how the structure of Australian production and trade has been affected by the expansion of global production networks. As conventional measures of international trade do not fully capture the impact of global supply chains, we present complementary estimates of value-added trade for...

This paper estimates the effects of the mining boom in Australia, using a large-scale structural macroeconometric model, AUS-M. We estimate that the mining boom boosted real per capita household disposable income by 13 per cent by 2013. The boom has contributed to a large appreciation of the...