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Regional Monetary Policy: An Australian Perspective

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  • P. Fraser
  • G. A. Macdonald
  • A. W. Mullineux

Abstract

Fraser P., MacDonald G. A. and Mullineux A. W. Regional monetary policy: an Australian perspective, Regional Studies . A structural vector autoregressive (SVAR) model for Australia is utilized to identify the domestic impacts of common monetary policy shocks on national and state business cycles and to consider the role of state diversification disparities for observed differences in responses to monetary policy innovations. Western Australia and Queensland differ to other states in their response to common shocks and evidence suggests this may be due to differences in their economic geographies. Overall, the Australian monetary union has become increasingly reliant on fiscal transfers particularly from Western Australia in the past two decades. This emphasizes the importance of a political union underpinning a successful monetary union.

Suggested Citation

  • P. Fraser & G. A. Macdonald & A. W. Mullineux, 2014. "Regional Monetary Policy: An Australian Perspective," Regional Studies, Taylor & Francis Journals, vol. 48(8), pages 1419-1433, August.
    • Handle: RePEc:taf:regstd:v:48:y:2014:i:8:p:1419-1433
    DOI: 10.1080/00343404.2012.714897
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    References listed on IDEAS

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    1. Mojon, Benoît & Peersman, Gert, 2001. "A VAR description of the effects of monetary policy in the individual countries of the euro area," Working Paper Series 92, European Central Bank.
    2. 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.
    3. Gerhard Bry & Charlotte Boschan, 1971. "Foreword to "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs"," NBER Chapters, in: Cyclical Analysis of Time Series: Selected Procedures and Computer Programs, pages -1, National Bureau of Economic Research, Inc.
    4. Leon Berkelmans, 2005. "Credit and Monetary Policy: An Australian SVAR," RBA Research Discussion Papers rdp2005-06, Reserve Bank of Australia.
    5. Gerhard Bry & Charlotte Boschan, 1971. "Cyclical Analysis of Time Series: Selected Procedures and Computer Programs," NBER Books, National Bureau of Economic Research, Inc, number bry_71-1.
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    Cited by:

    1. Anping Chen & Nicolaas Groenewold, 2019. "Regional resilience in China: The response of the provinces to the growth slowdown," Economics Discussion / Working Papers 19-06, The University of Western Australia, Department of Economics.
    2. Blanco, Emilio & Elosegui, Pedro & Izaguirre, Alejandro & Montes-Rojas, Gabriel, 2019. "Regional and state heterogeneity of monetary shocks in Argentina," The Journal of Economic Asymmetries, Elsevier, vol. 20(C).
    3. Andrei Shevelev & Maria Kvaktun & Kristina Virovets, 2021. "Effect of Monetary Policy on Investment in Russian Regions," Russian Journal of Money and Finance, Bank of Russia, vol. 80(4), pages 31-49, December.
    4. Anping Chen & Nicolaas Groenewold, 2019. "Macroeconomic shocks in China: Do the distributional effects depend on the regional source?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 62(1), pages 69-97, February.
    5. Paweł Gajewski, 2015. "Regionalne zróżnicowanie efektów impulsu polityki pieniężnej w Polsce," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 4, pages 27-47.
    6. Anping Chen & Nicolaas Groenewold, 2016. "Output Shocks In China: Do The Distributional Effects Depend On The Regional Source?," Economics Discussion / Working Papers 16-20, The University of Western Australia, Department of Economics.
    7. Chen, Anping & Groenewold, Nicolaas, 2018. "The regional effects of macroeconomic shocks in China," China Economic Review, Elsevier, vol. 48(C), pages 139-154.
    8. Zan Yang & Shuping Wu & Yanhao Shen, 2017. "Monetary Policy, House Prices, and Consumption in China: A National and Regional Study," International Real Estate Review, Global Social Science Institute, vol. 20(1), pages 23-49.

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