We develop a ten variable structural VAR model of the Australian economy for the period 1980 to 1995. The VAR methodology has not been widely applied in the Australian context, despite its popularity in quantitative macroeconomics internationally.

This paper concentrates upon the short-term changes in the exchange rate that might be considered as 'clouding' more fundamental changes. We focus on week to week changes in nominal bilateral exchange rates. The main concern of this paper is an attempt to identify the sources of exchange rate...