A Granular View of the Australian Business Cycle

18 Pages Posted: 17 May 2020

See all articles by Jorge Miranda-Pinto

Jorge Miranda-Pinto

University of Queensland

Yuanting Shen

affiliation not provided to SSRN

Date Written: December 2019

Abstract

We provide evidence supporting the hypothesis that idiosyncratic firm‐level shocks are important drivers of the Australian business cycle (granular hypothesis). We first document that the distribution of firm size in Australia is substantially asymmetric and follows a power‐law distribution with a long right tail. We then show that labour productivity shocks to the largest non‐financial firms in Australia account for about 20–40 per cent of the variation in Australian GDP growth over the period 2000–18. Besides energy sector firms, firms in the construction, transportation and consumer services sectors appear to be relevant drivers of GDP growth.

Suggested Citation

Miranda-Pinto, Jorge and Shen, Yuanting, A Granular View of the Australian Business Cycle (December 2019). Economic Record, Vol. 95, Issue 311, pp. 407-424, 2019, Available at SSRN: https://ssrn.com/abstract=3597594 or http://dx.doi.org/10.1111/1475-4932.12495

Jorge Miranda-Pinto (Contact Author)

University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

Yuanting Shen

affiliation not provided to SSRN

No Address Available

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