Output composition of the monetary policy transmission mechanism: Is australia different?

Tuan Phan

doi:10.1111/1475-4932.12121

Output composition of the monetary policy transmission mechanism: Is australia different?

Tuan Phan^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

This article compares the output composition of the monetary policy transmission mechanism in Australia to that for the Euro area and the USA. Four vector autoregressive (VAR) models are used to estimate the contributions of private consumption and investment to output reactions resulting from nominal interest rate shocks for the period 1982Q3-2007Q4. The results suggest that the investment channel plays a more important role than the consumption channel in Australia, while the contributions of the two channels are indistinguishable in the Euro area and the USA. The difference between Australia and the Euro area comes from differences in housing investment responses, whereas Australia is different to the USA mainly because it has a lower share of household consumption in total demand.

Original language	English
Pages (from-to)	382-399
Number of pages	18
Journal	Economic Record
Volume	90
Issue number	290
DOIs	https://doi.org/10.1111/1475-4932.12121
Publication status	Published - 1 Sept 2014

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title = "Output composition of the monetary policy transmission mechanism: Is australia different?",

abstract = "This article compares the output composition of the monetary policy transmission mechanism in Australia to that for the Euro area and the USA. Four vector autoregressive (VAR) models are used to estimate the contributions of private consumption and investment to output reactions resulting from nominal interest rate shocks for the period 1982Q3-2007Q4. The results suggest that the investment channel plays a more important role than the consumption channel in Australia, while the contributions of the two channels are indistinguishable in the Euro area and the USA. The difference between Australia and the Euro area comes from differences in housing investment responses, whereas Australia is different to the USA mainly because it has a lower share of household consumption in total demand.",

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Output composition of the monetary policy transmission mechanism: Is australia different?

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