Are the effects of monetary policy asymmetric in Australia?

This paper examines whether monetary policy shocks have asymmetric effects on output in Australia. Using methods similar to Cover (1992) together with some other simple threshold models, evidence is found of certain types of asymmetries when comparing monetary contractions to monetary policy expansions. Unanticipated decreases in interest rates appear to significantly raise GDP growth rates, whilst unexpected increases in rates do not appear to significantly lower growth. These findings are also found in a brief examination of the investment and consumption channels within the monetary policy transmission process. Economic growth is also significantly higher in a low interest rate regime (when interest rates are below a certain threshold, such as the sample average or average over some longer time period) than in a high interest rate environment. These results appear to refute the idea that monetary policy is like ‘pushing on a string’, at least for Australian data over the period 1973:1-2005:1

Are International Business Cycles Independent?

In this paper, we examine the relationships between business cycles in the G7 countries. We focus on whether recessionary periods in one country are independent of the timing of recessions in other countries in the G7, using three different methods for dating recessions. We find that the evidence is mixed on whether phases of the business cycle in North America and in European countries are independent, or whether there is a common phase structure in the business cycle across all the G7 economies. NBER dates suggest that business cycles are synchronised, while other methods for generating business cycle chronologies are consistent with regional, rather than international, cycles

Phases of the Canadian business cycle

In this paper we contrast a number of univariate models of Canadian GDP. Our preferred models are used to provide a business cycle chronology for Canada, which is compared with some existing, more judgmentally determined chronologies. We find that a simple, "two quarters of negative growth" rule for determining recession dates is the most similar to our chronology. We also find that the most recent recession in Canada was unique in both its length and the slow speed of recovery.

A Dynamic Model of Trade Union Contract Duration

dynamic uncertain trade union wage contract welfare trade-off precommitment ex-post flexibility contractual cycle

A Dynamic Model of Trade Union Contract Duration

There has been a great deal of research on trade unions and wage contracts in recent year, but there has been relatively little work on the determinants of contract length. This is unusual given that the duration of union contracts has varied substantially in post-war industrial economies both across time and across countries(see Dunlop J. and Bok D. (1970), Christofides L. N. and Wilton D. A. (1983), Ehrenberg Danziger and San (1984), Christofides L. N. (1985), Cecchetti (1987) and Bils M. (1987). This paper reviews the existing literature on contract duration and presents a simple explanation of optimal contract length for a wage setting trade union in a dynamic, uncertain environment. It is argued that optimal contract duration depends on a basic welfare trade-off between the benefits of wage precommitment and the costs of reduced ex-post wage flexibility. The cyclical characteristics of contracts in the model arguably provide an explanation for actual contractual cycles quite different from some alternative current models. The model may also be used to provide certain prediction concerning the determinants of contract length.dynamic, uncertain, trade union, wage contract, welfare trade-off, precommitment, ex-post flexibility, contractual cycles

Are business cycles independent in the G7?

In this paper we examine the relationships between business cycles in the G7 countries. We focus on whether recessionary periods in one country are independent of the timing of recessions in other countries in the G7, using three different methods for dating recessions. We find that the evidence is mixed on whether phases of the business cycle in North America and in European countries are independent, or whether there is a common phase structure in the business cycle across all the G7 economies. NBER dates suggest that business cycles are synchronised, while other methods for generating business cycle chronologies are more consistent with regional, rather than international cycles. We also find mixed evidence on whether the UK is synchronised with European countries, while Japan quite clearly has the cycle that is most independent of other G7 countries.G7, business cycles, recessions,