This paper is one of a series of papers about monetary policy and the economy. The focus of this particular paper is the way banks have changed their behaviour as a result of the process of deregulation that began in the 1970s and accelerated in the 1980s. The principal theme of the paper is the...

A presumption in much of the earlier literature on real exchange rates suggests their behaviour is decoupled from fundamentals. This paper develops a theoretical model which allows for increased globalisation and integration of international financial markets in a world where goods markets are...

Financial deregulation in the 1980s saw the lifting of regulations on interest rates charged by banks. In general, lending rates now respond more quickly to changes in banks’ cost of funds than they did in the regulated period. However, lending rates still do not always move one for one with...

No abstract available

The recent debate on Australia’s current account imbalance has focused on two issue: whether the dynamics of current account deficits and debt accumulation are leading to a “debt trap”, and what role (if any) should public policy play in altering the current account outcome. In this paper,...

This paper represents a first attempt to model the macroeconomic implications of recent changes in Australian financial markets: the floating of the Australian dollar; the introduction of tendering for government bonds; and the deregulation of banking in August 1984. The RBII model is adapted to...

The econometric technique of cointegration is used to model the aggregate demand for imports in Australia over the period from September 1974 to September 1989. We find that movements in total and endogenous imports are well explained by movements in domestic demand, the relative price of...

No abstract available

Using unpublished data at a disaggregated level, this paper provides a detailed picture of the direction of investment over the 1985/86 to 1988/89 investment boom. Most of the growth in non-farm capital expenditure has been concentrated in a few industries, in particular, office construction. We...

This paper examines how firms adjust output and prices in response to changes in demand and costs, paying particular attention to the role that capacity utilisation plays in affecting these relationships. It primarily uses qualitative survey data on manufacturing firms’ actual and expected...