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Intra & inter-regional industry shocks: A new metric with application to Australasian currency union

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  • Arthur Grimes

Abstract

We place regional industry structures at centre stage in currency union analysis, decomposing differences between regional and aggregate cycles into “industry structure” and “industry cycle” effects. The industry structure effect indicates whether a region's industry structure causes its cycle to deviate from the aggregate; the industry cycle effect indicates the importance of region-specific shocks in causing a deviation between cycles. We apply the methodology to Australasia. One region, ACT, has a material industry structure effect arising from its heavy central government concentration. No other region has a material industry structure effect; their cycles differ from the aggregate due to region-specific shocks.

Suggested Citation

  • Arthur Grimes, 2006. "Intra & inter-regional industry shocks: A new metric with application to Australasian currency union," New Zealand Economic Papers, Taylor & Francis Journals, vol. 40(1), pages 23-44.
    • Handle: RePEc:taf:nzecpp:v:40:y:2006:i:1:p:23-44
    DOI: 10.1080/00779954.2006.9558551
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    15. Suzi Kerr & Andrew Aitken & Arthur Grimes, 2004. "Land Taxes and Revenue Needs as Communities Grow and Decline: Evidence from New Zealand," Working Papers 04_01, Motu Economic and Public Policy Research.
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    18. Suzi Kerr, 2003. "Indigenous Forests and Forest Sink Policy in New Zealand," Working Papers 03_15, Motu Economic and Public Policy Research.
    19. Arthur Grimes & Suzi Kerr & Andrew Aitken, 2003. "Housing and Economic Adjustment," Urban/Regional 0310006, University Library of Munich, Germany.
    20. Arthur Grimes, 2003. "Economic Growth and the Size and Structure of Government: Implications for New Zealand," Working Papers 03_10, Motu Economic and Public Policy Research.
    21. Arthur Grimes & Andrew Aitken & Suzi Kerr, 2004. "House Price Efficiency: Expectations, Sales, Symmetry," Urban/Regional 0408001, University Library of Munich, Germany.
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    25. Arthur Grimes, 2004. "New Zealand: A Typical Australasian Ecomony?," Working Papers 04_11, Motu Economic and Public Policy Research.
    26. Arthur Grimes & Robert Sourell & Andrew Aitken, 2005. "Regional Variation in Rental Costsfor Larger Households," Urban/Regional 0509014, University Library of Munich, Germany.
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    Cited by:

    1. Viv Hall & John McDermott, 2008. "An Unobserved Components Common Cycle For Australia? Implications For A Common Currency," CAMA Working Papers 2008-11, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, University Library of Munich, Germany.
    3. Sebastian Edwards, 2006. "External Imbalances in an Advanced, Commodity-Exporting Country: The Case of New Zealand," NBER Working Papers 12620, National Bureau of Economic Research, Inc.
    4. Grimes, Arthur, 2005. "Regional and industry cycles in Australasia: Implications for a common currency," Journal of Asian Economics, Elsevier, vol. 16(3), pages 380-397, June.
    5. Arthur Grimes, 2007. "Trans-Tasman shocks: A mediating role for the NZDAUD," New Zealand Economic Papers, Taylor & Francis Journals, vol. 41(2), pages 237-250.
    6. Viv B. Hall & C. John McDermott, 2012. "Is there an unobserved components common cycle for Australasia? Implications for a common currency," New Zealand Economic Papers, Taylor & Francis Journals, vol. 46(2), pages 119-141, September.
    7. Viv Hall & John McDermott, 2008. "An Unobserved Components Common Cycle For Australia? Implications For A Common Currency," CAMA Working Papers 2008-11, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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