We estimate an unobservable domestic business conditions index for Australia using a variety of observable macroeconomic and financial variables, relating it to an unobservable external index involving external variables relevant to Australia. Our small open economy, dynamic factor model uses...

Using a four-state model, we show that Australian labour markets became more flexible after 1980, but most gains occurred before 1993. We find that the responses of the transition probabilities to the phases of the business cycle are gender-dependent. For men, job-losing probabilities are...