The Australian Business Cycle: Joe Palooka or Dead Cat Bounce?

17 Pages Posted: 28 Dec 2002

See all articles by Philip M. Bodman

Philip M. Bodman

University of Queensland - Faculty of Business, Economics and Law

Mark Crosby

University of Melbourne - Melbourne Business School

Abstract

We address the question of whether asymmetry in the business cycle and asymmetry in the persistence of negative versus positive shocks characterises Australian output growth. Using nonlinear time series models we provide some evidence consistent with the idea that Australian output growth is characterised by three distinct phases: contractions, high-growth recovery periods and "normal" or moderate growth periods. This implies that Australian output fluctuations have a significant transitory component and is supportive of the "output-gaps" view and "plucking" model view of economic fluctuations. In contrast to recent evidence for the US and Canada however, we find that Australian GDP growth does not exhibit important asymmetries in the responses of output growth to positive and negative shocks.

Suggested Citation

Bodman, Philip M. and Crosby, Mark, The Australian Business Cycle: Joe Palooka or Dead Cat Bounce?. Available at SSRN: https://ssrn.com/abstract=313215

Philip M. Bodman (Contact Author)

University of Queensland - Faculty of Business, Economics and Law ( email )

Brisbane QLD 4072, Queensland
Australia
(+61 7) 3365 3320 (Phone)

Mark Crosby

University of Melbourne - Melbourne Business School ( email )

200 Leicester Street
Carlton, Victoria 3053 3186
Australia

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