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Extending a SVAR Model of the Australian Economy

Author

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  • MARDI DUNGEY
  • ADRIAN PAGAN

Abstract

Dungey and Pagan (2000) present a SVAR model of the Australian economy which models macroeconomic outcomes as transitory deviations from a deterministic trend. In this paper we extend that model in two directions. First, we relate it to an emerging literature on Dynamic Stochastic General Equilibrium modelling of small open economies. Second, we allow for both transitory and permanent components in the series and show how this modification has an impact on the design of macroeconomic models.

Suggested Citation

  • Mardi Dungey & Adrian Pagan, 2009. "Extending a SVAR Model of the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 85(268), pages 1-20, March.
    • Handle: RePEc:bla:ecorec:v:85:y:2009:i:268:p:1-20
    DOI: 10.1111/j.1475-4932.2008.00525.x
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    as
    1. Daniel Buncic & Martin Melecky, 2008. "An Estimated New Keynesian Policy Model for Australia," The Economic Record, The Economic Society of Australia, vol. 84(264), pages 1-16, March.
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